Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Water Provisional Order Bill,

Read the third time, and passed.

Oral Answers to Questions — SPITZBERGEN.

BRITISH ENTERPRISE.

Sir MARTIN CONWAY: 1.
asked the Under-Secretary of State for Foreign Affairs whether the Spitzbergen Commission appointed by the Supreme Council in Paris has advised that the sovereignty of the Spitzbergen Archipelago be given to Norway; who was the British representative on that Commission; whether he assented to that recommendation; and whether His Majesty's Government agree with it?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The answers to the first, third, and fourth parts of my hon. Friend's question are in the affirmative. As regards point 2, the representative's name is the hon. Charles Tufton, who acted under the instructions of the Peace Delegation and the Secretary of State.

Sir M. CONWAY: Was the sovereignty given to Norway, or only a mandate? Was the British representative an expert on the question; and did he obtain any further information or instructions from people who understood the problem?

Mr. HARMSWORTH: I understand that the sovereignty has been given to the Norwegian Government; the other points are covered by the subsequent questions of the hon. Gentleman.

Colonel YATE: Was this representative of the Foreign Office the same official who gratuitously signed the statement that Spitzbergen was terra nullius?

Mr. HARMSWORTH: I did not quite catch the question of the hon. and gallant Gentleman.

Sir M. CONWAY: 2.
asked the Under-Secretary of State for Foreign Affairs whether about 85 per cent. of the total mineral area of Spitzbergen has already been acquired by British enterprises acting with the express encouragement and active support of the British Government and with its guarantee of the protection of the British flag?

Mr. HARMSWORTH: According to the most recent figures in my possession, the amount of territory in Spitzbergen claimed by British companies is approximately 4,000 square miles, by Norwegian 900 square miles, by Swedish 350 square miles, and by Russian 100 square miles. The claims of the British companies are thus about 75 per cent. of the whole areas claimed. In the absence, however, of any accurate and comprehensive survey, it would be difficult to say what proportion of the total mineral area of Spitzbergen is covered by the British claims. If by "guarantee of the protection of the British flag" my hon. Friend implies that His Majesty's Government promised at any time to annex Spitzbergen, I can only say that I am unaware of any such undertaking. I think I can assure my hon. Friend that the conditions attached to the treaty by which the sovereignty of Spitzbergen is conferred on Norway will adequately safeguard existing British rights.

Colonel YATE: Are British rights safeguarded against Norwegian mining rules?

Mr. HARMSWORTH: I understand there are special provisions in the treaty safeguarding British rights.

Colonel WEDGWOOD: Does that mean that British companies mining in Spitzbergen will be enabled to escape the English Income Tax of 6s. in the £?

Mr. HARMSWORTH: I am not an authority on that.

Sir M. CONWAY: 3.
asked the Under-Secretary of State for Foreign Affairs whether the undertaking given to repre-
sentatives of British enterprises in Spitzbergen that they should be consulted and their evidence taken and considered before any decision was arrived at as to the future status of Spitzbergen was carried out; and, if so, who was consulted?

Mr. HARMSWORTH: My hon. Friend's question is based on a misapprehension. No such undertaking was given by His Majesty's Government. The second part of the question does not, therefore, arise.

Colonel YATE: Are the Foreign Office aware that Spitzbergen was annexed to the British Crown in the seventeenth century?

Mr. HARMSWORTH: The Foreign Office is quite familiar with the history of Spitzbergen.

Sir M. CONWAY: As to the terms under which Spitzbergen is ceded to Norway, will there be any opportunity of discussing them?

Mr. HARMSWORTH: I think the terms of the Treaty will be published, and I personally should welcome a discussion on the subject.

Colonel YATE: Can the hon. Gentleman say when the terms of the Treaty will be published?

Mr. HARMSWORTH: On the spur of the moment, I cannot.

Colonel YATE: Is there any prospect of it in the near future?

Mr. HARMSWORTH: I should think so; I cannot say definitely.

Oral Answers to Questions — RUSSIA

BALTIC PROVINCES.

Lieut.-Commander KENWORTHY: 4.
asked the Under-Secretary of State for Foreign Affairs whether M. Ullmani's National Government in Latvia has been recognised; and what support has been given to our Allies, the Letts, against Colonel Bermondt, General von Eberhardt, and other adventurers in the Baltic provinces?

Mr. HARMSWORTH: His Majesty's Government on 11th November, 1918,
granted personal recognition to the Lettish National Council as a de facto Independent body. In answer to the second part of the question, I would refer the hon. and gallant Member to the answer to-day to the hon. and gallant Member for Newcastle-under-Lyme.

Lieut.-Commander KENWORTHY: 5.
asked whether the Esthonian Government is still being left entirely free to conduct its negotiations with the Soviet Government of Moscow?

Mr. HARMSWORTH: The answer to the hon. and gallant Member's question is in the affirmative.

Lieut.-Commander KENWORTHY: 7.
asked the Under-Secretary of State for Foreign Affairs what pressure is now being brought to bear on the German Government to compel the withdrawal of troops under the command of General von Eberhardt or any other officer who may have succeeded General von der Goltz; do closer relations exist between the leaders of these troops and General Yudenitch; and has he considered the question of bringing pressure to bear upon General Yudenitch as well as upon the German Government?

Mr. HARMSWORTH: In answer to the first part of the question, I would refer the hon. and gallant Member to the second part of the answer to-day to the hon. and gallant Member for Newcastle-under-Lyme. The answer to the second part of the question is in the negative, so far as His Majesty's Government are aware. The third part of the question, therefore, does not arise.

Lieut.-Commander KENWORTHY: May I ask if the hon. Gentleman is aware of any secret communications that have passed directly between the Allied Council in Paris and the commanders of these Germane troops which have not been published in the Press?

Mr. HARMSWORTH: No, Sir, I am not aware of any such communications.

Colonel WEDGWOOD: That is to say no instructions have been given to General Yudenitch or the Germans to co-operate in any way against the Bolsheviks?

Mr. HARMSWORTH: I said I was not unaware of any such instructions.

SWEDISH RED CROSS (WORKERS' CHILDREN).

Lieut.-Commander KENWORTHY: 6.
asked the Under-Secretary of State for Foreign Affairs if the arrangements made this summer by Swedish Socialists and the Swedish Red Cross for entertaining several hundred Russian workers' children in specially poor circumstances had to be abandoned owing to the action of the British Government in the matter?

Mr. HARMSWORTH: The answer is in the negative.

RUSSIAN SUBJECTS (RETURN).

Sir PHILIP MAGNUS: 39.
asked the Home Secretary whether Russian subjects who returned to Russia for the purpose of joining the Russian forces at the time when Russia was fighting with the Allies against Germany are permitted to re-enter this country if they have wives and children here and nothing criminal is known against them?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Major Baird): I would refer the hon. Baronet to the answer which my right hon. Friend gave to a question by the hon. Member for Central Hull (Lieut.-Commander Kenworthy) on the 28th instant.

Mr. BULLITT'S STATEMENTS.

Mr. LUNN: 47.
asked the Prime Minister (1) if on 16th January of this year, at a meeting of the Peace Council to discuss Russia he declared himself against militarist intervention in Russia to crush Bolshevism;
(2). whether on 21st January he suggested at the meeting of the Council of Ten that a meeting of Russian delegates to discuss peace negotiations with Russia should be held in Paris;
(3). whether on 21st January, at a meeting of the Peace Council to discuss Russia, he expressed the opinion that Koltchak was a monarchist who was collecting the old régime round him; whether the decision to support Koltchak was taken in spite of his considered opinion; and, if so, on what grounds; and
(4). whether, in view of Mr. Bullitt's version of the proceedings, he will publish an official version of the minutes of the Peace Council's meetings on 16th January and 21st January, 1919?

Mr. BONAR LAW (Leader of the House): My right hon. Friend the Prime Minister is not at liberty to disclose the proceedings of the Council of Four and the Council of Ten.

Mr. LUNN: Are we to understand that the whole narrative that has been given by the Press of this country as to what was said by Mr. Bullitt is a tissue of lies, including the statement regarding the breakfast to which he was invited.?

Mr. BONAR LAW: A breakfast cannot be a "tissue of lies."

Mr. LUNN: The statement, I said.

Mr. BONAR LAW: I have already said that the substance of the statement made by Mr. Bullitt is so absolutely inaccurate that it deserved the epithet given to it by the Prime Minister.

Mr. SWAN: What steps are being taken by the Government to get a reply for Mr. Bullitt that there is no truth in it, and to have the reply laid before the House so that the House may be able to appreciate the veracity of the statement.

Mr. BONAR LAW: Any hon. Members who wish to put Mr. Bullitt's assertions against the statement of the Prime Minister must take their own methods to do so.

NAVAL. AND MILITARY POLICY.

Mr. ADAMSON: 53.
asked the Prime Minister if he can now indicate when it is proposed to make a statement and allow facilities for discussion on the Government's naval and military policy regarding Russia and its relations with forces operating in Russia?

Mr. BONAR LAW: I hope that the Army Vote on Account will give sufficient opportunity for discussion on this subject.

Lieut.-Commander KENWORTHY: Are we to understand that we may discuss naval matters on the Army Estimates?

Mr. BONAR LAW: I hope my hon. Friend will wait and see what amount a discussion is convenient.

Mr. BILLING: Surely this discussion could take place this afternoon on the question of financial expenditure?

PETROGRAD (MEDICAL SUPPLIES).

Colonel WEDGWOOD: 58.
asked the Prime Minister whether he is prepared to
sanction the passing into Petrograd of a small yacht loaded only with medicines and disinfectants that are asked for by the Petrograd Corporation Society, and for which the society is prepared to pay?

Mr. HARMSWORTH: I see no objection in principle to this proposal. But it will be necessary to submit it to the Supreme Council of the Allied and Associated Governments; and before action can be taken full particulars as to the proposed transaction would be required—such as the port from which the yacht would sail and the means of ensuring that the cargo is confined to medical stores.

Oral Answers to Questions — FINNISH GOVERNMENT.

Colonel WEDGWOOD: 8.
asked whether any pressure is being brought to bear upon the Finnish Government, either by His Majesty's Government or by the Supreme Council, to induce them to attack Soviet Russia?

Mr. HARMSWORTH: The answer to my hon. and gallant Frliend's question is in the negative.

Oral Answers to Questions — PEACE TREATY (AUSTRIA).

Mr. OMAN: 9.
asked when the text of the Treaty of Peace with Austria, and the explanatory maps, will be made accessible to Members of the House?

Mr. HARMSWORTH: The English text of the Treaty of Peace with Austria is ready to be laid before Parliament, but copies of the map to be annexed thereto are not yet available. Every effort is being made to expedite the matter. If the House would prefer that the text should be laid in advance of the map, this can be done almost at once.

Oral Answers to Questions — MONTENEGRO.

Mr. RONALD McNEILL: 10.
asked the Under-Secretary of State for Foreign Affairs whether the De Salis Report on conditions in Montenegro has yet been received; and, if so, whether he will lay it upon the Table of the House?

Mr. HARMSWORTH: The Report has been received, but the publication has not been considered desirable in present circumstances.

Mr. McNEILL: Is the hon. Gentleman aware that it is generally believed that this Report is very condemnatory of the action of Serbians in Montenegro, and under these circumstances does he not think that the House of Commons is entitled to have the Report?

Mr. HARMSWORTH: I have the Report, but I think I can assure the House that it will not be convenient to publish it at the present time.

Mr. McNEILL: Can my right hon. Friend give any reasons for that decision?

Mr. HARMSWORTH: I do not think I could do so in answer to a question.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

Major GLYN: 12.
asked the Pensions Minister what is the present estimated sum of money paid out each month in pensions to disabled and discharged men and dependants, respectively; what is the present estimated cost each month for the administration and issue of this money; and how many individuals are concerned under these three headings?

The MINISTER of PENSIONS (Sir Laming Worthington-Evans): There are 957,000 disabled officers and men to whom payment of pensions, gratuities or allowances is being made at the rate of £3,970,000 a month. This sum includes the cost of the allowances paid in respect of 670,000 children of disabled men. There are 930,000 widows, children and other dependants of deceased officers and men, to whom payment is being made at the rate of £2,609,000 a month. The monthly cost of administration by the Ministry of Pensions, including fees to medical boards, hospital staffs, etc., is £260,000. The expenditude by the local war pensions committees on advances, allowances, etc., is at the rate of £1,742,000 a month, and the administration expenses of the committees is approximately £83,000 a month.
The total expenditure on benefits is, therefore, £8,321,000 a month, and on administration £343,000 a month. Admini-
strative expenses (including the medical charges I have mentioned) amount, therefore, to 4 per cent of benefits. All the figures I have given are approximate.
The number of the staff (other than that of local war pensions committees) is 17,815. I am unable to say the numbers employed by the Committees.

Major GLYN: Is it anticipated that the cost of the administration is likely to rise in the near future?

Sir L WORTHINGTON-EVANS: No; I do not think it should rise, I think in a few months it ought to drop.

Sir A. FELL: Is that calculation on the basis of a calendar or lunar month?

Sir L. WORTHINGTON-EVANS: It is taken on a four-weekly basis, I think, but I will let my hon. Friend know.

Mr. NEIL MACLEAN: 13.
asked the Pensions Minister whether No. 51711, Sapper Nathaniel Robertson, Royal Engineers, was discharged from the Army on medical grounds and died two months after discharge; whether an Army discharge on medical grounds is a qualification for a pension; whether he is aware that his widow, with five children to keep, has no pension, and is in receipt of relief from the parochial authorities; and whether anything can be done to award a pension?

Sir L. WORTHINGTON-EVANS: The first application for pension in this case was made on 30th September, 1219, in a letter in which the widow states that her husband was discharged on medical grounds 5th December, 1914, and died 28th July, 1915, she explains that she did not apply before because she thought she was not entitled to pension as the man died at home. The usual steps are being taken to investigate her claim, and notification that it is under consideration has been sent to the local war pensions committee. The discharge of a soldier on medical grounds is not in itself sufficient to entitle his widow to pension, the actual cause of death, and the connection between that cause and the man's Army service being material factors.

Mr. MACLEAN: 14.
asked the Pensions Minister whether W. M'Dermott, No. 327035, Argyll and Sutherland Highlanders, was under treatment in Norwich War Hospital, and while there during the night fell through an open window at his bed-
side a distance of 30 feet, causing an injury to his spine; whether he was placed on treatment and paid an allowance by the local war pensions committee; is he aware that this allowance has been stopped, although this man is still receiving treatment, pending his admission to the Western Infirmary, Glasgow, for an operation to his spine; and what steps he is prepared to take to enable this ex-soldier to maintain his wife and family without having recourse to parochial relief?

Sir L. WORTHINGTON-EVANS: I have found it necessary to communicate with the Scottish Regional Headquarters of the Ministry on this matter. I will inform the hon. Member of the result.

Major DAVID DAVIES: 16.
asked the Pensions Minister if his attention has been directed to the case of Sidney Henry Dyer who, when charged at the London sessions with shop-breaking, was stated to be receiving a pension of 11s. per week for war disablement, resulting from wounds which prevented him from doing any work; whether he is aware that the judge released this man on the ground that it was impossible for him to maintain himself honestly; and if lie will state what action has been taken in the matter?

Sir L. WORTHINGTON-EVANS: Mr. Dyer's position is that he is prevented by his disablement from resuming his prewar occupation, but having considerable working capacity left to him cannot be-awarded pension at total disablement rate. If the reports in the Press are correct, the magistrate appears to have been ignorant of the training scheme and to have thought that in such circumstances as these the only method of supplementing the pension is resort to crime. The alternative offered by the Government and accepted by many thousands of pensioners is training in some new occupation. Mr. Dyer has now consented to undergo a course of training as switchboard attendant and during the period of the course he will draw an allowance, in lieu of pension, of at least 40s. a week.

Sir P. MAGNUS: Is the right hon. Gentleman taking any other action in the matter?

Sir L. WORTHINGTON-EVANS: I am afraid it is not for me to take action; but I am calling the attention of the Home Secretary to the matter.

Oral Answers to Questions — IRELAND.

LUNATIC POOR (RATE-IN-AID).

Mr. LYNN: 17.
asked the Chief Secretary for Ireland whether, in view of the extreme hardship on local ratepayers in maintaining the lunatic poor, the unfair incidence of taxation, and the unsatisfactory condition of the Local Taxation (Ireland) Account, he will consider the advisability of increasing the rate-in-aid to 50 per cent. of the actual cost of maintaining the lunatic poor?

The CHIEF SECRETARY for IRELAND (Mr. Macpherson): I would refer the hon. Member to the reply given to his similar question on this subject on the 22nd May last, and to which there is nothing to add at present.

EDUCATION BILL.

Mr. T. W. BROWN: 18.
asked the Chief Secretary when he proposes to introduce the Bill dealing with education in Ireland; and whether, pending the introduction of this Bill, he will take steps to have the financial resolutions of the two Committees of Inquiry put into immediate operation?

Sir EDWARD CARSON: 22.
asked when it is intended to introduce the Bill dealing with education in Ireland?

Mr. MACPHERSON: Owing to Parliamentary exigencies, I regret I cannot at present give a definite date for the introduction of the Bill. As regards the latter part of the question of my hon. Friend and learned Member for North Down, I would ask him to await the Bill, which will state the financial proposals contemplated.

Sir E. CARSON: Having regard to the delay in the introduction of this Bill, can the right hon. Gentleman say whether any steps have been taken, even of a temporary character, to provide elementary education for 15.000 children in Belfast who are receiving none?

Mr. MACPHERSON: I regret that no steps have been taken, but I am hoping that the early introduction of the Bill will provide for these children.

DISCHARGED SOLDIERS (GRANTS OF LAND).

Major O'NEILL: 20.
asked when it is proposed to introduce the promised legislation for granting land to discharged soldiers in Ireland?

Mr. MACPHERSON: I hope to introduce this Bill next week.

HOUSING ACT

Major O'NElLL: 21.
asked whether a railway company in Ireland is allowed to constitute itself a public utility society under the provisions of the Irish Housing Act for the purpose of building houses for its employés in the vicinity of its various stations?

Mr. MACPHERSON: A railway company as such cannot be a public utility society under the provisions of the Irish Housing Act, but as such a society can be formed by eight persons, one of whom acts as secretary, it is open to any railway company to promote the formation of a society amongst its employés. An explanatory memorandum on the subject was sent to all the Irish railway companies in June last, and some weeks ago further particulars of State aid available were communicated to them.

Major O'NEILL: Can the right hon. Gentleman say whether any Irish railway company, as such, has taken advantage of these provisions?

Mr. MACPHERSON: I cannot say offhand, but I will make inquiries and communicate with my hon. and gallant Friend.

ROYAL IRISH CONSTABULARY (PAY).

Colonel YATE: 23.
asked whether the pay of the Royal Irish Constabulary has been raised correspondingly to the increased pay and allowances given to the Metropolitan and other police in Great Britain; and, if not, will he explain why this course has not been adopted?

Mr. MACPHERSON: A Bill is at present before the House in which power is sought to raise the pay of the Royal Irish Constabulary and Dublin Metropolitan Police according to the rates recently sanctioned for the police in Great Britain.

Colonel YATE: Will that Bill also deal with the question of pensions and pensioners who have already received pensions?

Mr. MACPHERSON: It deals with pay, pensions, and allowances, but it does not deal with the case of Royal Irish Constabulary and the Dublin Metropolitan Police pensioners; but, as I stated in the
course of the Debate, I am in communication with the Treasury with regard to that point.

Sir F. HALL: Is it the intention of the Government to grant pensions to the widows of those officers who resigned previously to September, 1918?

Mr. MACPHERSON: I do not think so. I think the Bill, as at present drawn, deals only with men who were actually in the service on 1st April of this year.

Sir F. HALL: Is the right hon. Gentleman aware of the fact that there is a great feeling amongst the members of the police force on this matter at the present time at those widows being left out?

Mr. MACPHERSON: I will certainly look into the matter.

NEWSPAPERS (SUPPRESSION).

Mr. MacVEAGH: 24.
asked the Chief Secretary if he will give the names of any newspapers temporarily suppressed in Ireland; and how many have been permanently suppressed since May, 1916?

Mr. MACPHERSON: Forty-three newspapers have been suppressed in Ireland, at various times, since the 1st May, 1916. Three have not applied for permission to resume printing. Of the others eight refused to sign the necessary undertaking not to print anything that would constitute an offence under any Statutory provision and eight have ceased to exist. I shall be very glad to supply the hon. and learned Member with a list of the newspapers if he so desires.

DEATHS FROM INJURIES.

Mr. HARTSHORN: 25.
asked the Chief Secretary whether he can state in which cases civilians have died in Ireland during the last three years as the results of injuries inflicted on them by the police or military?

Mr. MACPHERSON: Since the Rebellion, five civilians have died from injuries inflicted by the Royal Irish Constabulary. Two of these men were killed by police who were defending Gortatlea Police Barracks from attack by armed disguised men. In another case the police fired on a body of cattle-drivers who refused to cease driving the cattle and were threatening police. The police fired first over their heads, and then at them. One man was wounded, and died.
In another case a man was discovered leaving a house after committing a burglary. He was fired at in the darkness, and died next day. In the fifth case a man rushed to the Police Barracks to get help to quell a row in a public-house. The police suspected an intention of raiding the barracks, and fired at him through a window, and he died from the effects of the wound.
Five civilians died from injuries inflicted by the military. Of these one was shot by a sentry when attempting to escape from lawful custody, and three were shot by a sentry after frequent challenging. In the other case, while the military were clearing a Sinn Fein hall into which a number of persons who had engaged in illegal drilling had gone, one man received a bayonet wound, from which he died.

Mr. LYNN: How many police and soldiers were murdered or maimed during the same period?

Mr. MACPHERSON: I cannot answer my hon. Friend's question offhand, but the House and the country know well that recently a very large number of these gallant men have been foully and dastardly murdered.

Mr. LYNN: Is the right hon. Gentleman aware that Sinn Fein is encouraging the murders?

Mr. MacVEAGH: Can the right hon. Gentleman say how many police and soldiers were murdered by the right hon. Gentleman's constituents in 1886?

Mr. MACPHERSON: I wish my hon. Friend would deal with present facts.

PROCLAMATIONS.

Mr. TYSON WILSON: 28.
asked the Chief Secretary if he can state the total number of Proclamations issued by the authorities in Ireland in the last three years?

Mr. MACPHERSON: During the last three years 134 Orders were issued under Regulations 9A and 9AA of the Defence of the Realm Regulations, 32 Proclamations were made under the Criminal Law and Procedure (Ireland) Act, 1887, and 8 Proclamations for extra police under the Act 6 and 7 William IV., cap. 13.

SINN FEIN ORGANISATION.

Mr. MacVEAGH: 29.
asked who is responsible for the recent issue from
Dublin Castle of a list of crimes alleged to have been committed by the Sinn Fein organization?

Mr. MACPHERSON: I am.

Mr. MacVEAGH: Can the right hon. Gentleman say why, if the leaders of Shin Fein are responsible for those outrages, he has not put them on trial?

Mr. MACPHERSON: I cannot add anything to what I have said, but I take the entire responsibility for that.

Captain W. BENN: Will the right hon. Gentleman give to the House the evidence on which he alleges that the Sinn Fein organisation is responsible for these crimes?

Mr. MACPHERSON: I wish I could. It would take me the whole of the day to give the evidence, because there is complete and full evidence that the whole of these crimes are committed by Sinn Feiners, and by nobody else.

Mr. MacVEAGH: If that is so, why do you not prosecute them? It is because the statement is untrue.

Mr. MACPHERSON: The statement is true.

CURFEW ORDER.

Mr. NEWBOULD: 30.
asked on whose authority the recent Curfew Order was issued in Ireland; and in what districts is it being enforced?

Mr. MACPHERSON: The Order was issued on the recommendation of the Irish Government, and so far it has not been made operative in any district.

PROHIBITED PUBLIC MEETINGS.

Mr. A. SHORT: asked how many public meetings have been prohibited in Ireland during the past twelve months?

Mr. MACPHERSON: Seventy-one meetings were prohibited in Ireland during the past twelve months.

IRISH MEMBERS OF PARLIAMENT.

Mr. SHORT: 32.
asked whether all Irish Members of Parliament are permitted to address their constituents?

Mr. MACPHERSON: Irish Members of Parliament are not prevented from
addressing their constituents if there is reason to believe that they will abstain from the use of inflammatory language or language calculated to incite to a disturbance of the public peace. In some parts of the country it has been deemed necessary, owing to the criminal activities of Sinn Fein, to prohibit, under the Defence of the Realm Regulations, the holding of public meetings, except with the permission of the local constabulary officer responsible for the preservation of the public peace, and such permission is not withheld where the circumstances justify it.

Mr. SWAN: Are their speeches perused before they are delivered?

Mr. MACPHERSON: Not that I know.

Mr. SWAN: Then why are they prevented from holding meetings?

Mr. MACPHERSON: The Irish Government know full well what type of speech will be delivered by a certain type-of men.

Captain W. BENN: Does the right hon. Gentleman take any steps to prevent meetings being held at which inflammatory speeches are delivered by the Leader of the Ulster party?

Mr. MACPHERSON: I know of no such speech.

Lieut.-Commander KENWORTHY: Is Sinn Fein the only political party to which this rendering of the law applies and to which these drastic regulations are applied?

Mr. MACPHERSON: Since I went to Ireland the only party delivering inflammatory speeches inciting to the murder of the servants of the Crown has been the Sinn Fein party, and so long as these speeches are likely to be delivered by these men I will prohibit them.

Mr. MacVEAGH: Will the right hon. Gentleman now give to the House of Commons the names of those Sinn Fein Members of Parliament who have incited to the murder of policemen?

Mr. MACPHERSON: If my hon. Friend will put down a question I will give him the names.

Mr. MacVEAGH: Why do you not prosecute them?

Mr. MACPHERSON: I have prosecuted them, and a good many of them are in prison now.

Mr. MacVEAGH: On a charge of inciting to murder policemen?

Mr. MACPHERSON: Yes, on a charge of inciting to murder policemen.

Mr. MacVEAGH: That statement is also absolutely untrue.

CIVILIAN PRISONERS (COURT OF TRIAL).

Lieut.-Colonel Sir SAMUEL HOARE: 35.
asked the Chief Secretary for Ireland whether he will substitute trial by Civil Court for trial by court-martial for all civilian prisoners in Ireland?

Mr. MACPHERSON: The cases in which civilians are tried by court-martial in Ireland are those for breach of Regulations under the Defence of the Realm Act. Even in these cases where reasonably practicable trial takes place before a civil tribunal.

Sir S. HOARE: Is the right hon. Gentleman aware that there is a large body of public opinion, not confined in any way to one party, that is strongly in favour of the return to the practice of trying all civilian prisoners by Civil Courts?

Mr. MACPHERSON: No one is more anxious than I am for a return to that practice, but in the present condition of affairs in Ireland I cannot see my way to reverting to it.

Mr. MacVEAGH: Whose fault is that?

Oral Answers to Questions — RUSSIAN SUBJECTS.

Colonel WEDGWOOD: 35.
asked the Home Secretary whether the eighty Russians deported from England in May or June last are still detained in internment in Turkey, or are being sent on to parts of Russia under the control of General Denikin, K.C.B.; if the latter, what steps are being taken to see that they are not hanged or imprisoned; and under what Vote the charge for feeding and guarding these men is to be found?

Major BAIRD: The latest information received through the Foreign Office from the Admiral in Command at Constantinople is that these men were landed on the 6th September at Novorossisk. I have
no reason to doubt that the naval authorities made proper arrangements for their safety. The charges in connection with their deportation[...] to the time of sailing fall on the Home Office Vote; their maintenance on board ship would, I presume, be defrayed by the Ministry of Shipping.

Lieut.-Commander KENWORTHY: Might I ask for a definite answer to the first part of the question; whether thess. inert have been handed over to the forces under General Denikin? Surely my hon. and gallant Friend knows that'?

Major BAIRD: I have given the House fully the information that we have with regard to tins matter.

Oral Answers to Questions — ROAD TRAFFIC (REAR LIGHTS)

Sir F. HALL: 36.
asked the Home Secretary if the Order with regard to the carrying of red rear lights was revoked on the advice of the police authorities; if the Order had to be re-enacted owing to the difficult, traffic conditions at the time of the strike on the railways; and if it is now proposed to retain the Order in force permanently?

Major BAIRD: The answer to the first part of the question is in the negative. The answer to the second part is in the affirmative. Since the Order was revoked, the Home Office has received many representations from police authorities urging that the requirements of the Order should be re-imposed. The Order cannot be retained permanently in its present form, but the question of legislation is under consideration by my right hon. Friend, the Minister of Transport.

Sir F. HALL: Does my hon. and gallant Friend recognise the danger that there is, for instance, to cyclists passing along the roads at night, and will he see that an Order is made and that it is carried out?

Major BAIRD: I will convey that view to my right hon. Friend. The difficulty about making the present Order permanent is that it was made under war conditions. The dangers, however, are present to the Government, and the matter is being taken up by my right hon Friend.

Sir F. HALL: Considering that there is an Order in operation at the present time, even although it is of a temporary charac-
ter, will my hon. and gallant Friend give instructions and see that it is properly carried out?

Major BAIRD: I think in the circumstances all is being done that can be done pending a decision.

Oral Answers to Questions — WAR DOCUMENTS (DISPOSAL).

Mr. RAPER: 38.
asked the Home Secretary what is being done with all the dossiers collected by various Government Departments during the War, by censorship and/or other means, and relating to the business and private affairs of British firms and individuals?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Forster): As regards documents of the categories referred to which were collated by the Censorship during the War, I understand that all of these, with the necessary exception of those relating to the national defence or to contraventions of the law, have now been destroyed. As far as documents of these categories have been collated by other Departments of Government, the same principle of selection and retention has been and will be observed. In no case is access permitted to any of these documents save to authorised officials.

Oral Answers to Questions — MONMOUTHSHIRE POLICE.

Mr. CHARLES EDWARDS: 40.
asked the Home Secretary if, prior to the War, the Monmouthshire police were allowed one day's rest per week, but that during the War they were deprived of this owing to the depletion of the force, no payment being made for this extra duty; that when application was made for payment the Standing Joint Committee were informed that an Act of Parliament had been passed which prevented any payment being made for those days; and will he state what Act this was and when it was passed?

Major BAIRD: I think the Police (Weekly Rest Day) Act, 1910, must be the Act referred to, but its effect is not as stated in the question. The weekly rest day was granted to the police on the express condition that it might be suspended during an emergency such as the War, and the police cannot therefore
claim additional pay as of right; but there is nothing in the Act to prevent the police authority, if it sees reason to do so, from granting extra pay, or—which appears the better course—from giving time off in place of the lost rest days.

Mr. PEMBERTON BILLING: May we take it from the fact that the Home Office have answered this question referring to the Monmouthshire police that in future that is the proper Department to which to address questions affecting the police all over the country, and not merely the London police?

Major BAIRD: I should be sorry to answer the question off-hand; if my hon. Friend will put down a question, I will give him the answer.

Oral Answers to Questions — POLICE PENSIONS.

Sir JAMES REMNANT: 41.
asked the Home Secretary if he is now in a position to deal with all police pensions dating prior to 1st April, 1919?

Major BAIRD: My right hon. Friend has repeatedly considered this question, but, much as he sympathises with the pensioners who, like others dependent on small fixed incomes, are greatly affected by present conditions, he regrets he does not see his way to propose legislation in order to give relief to the particular class of pensioners in whom the hon. Member is interested.

Oral Answers to Questions — S.S. "EDINBURGH CASTLE" (SOUTH AFRICAN DELEGATES).

Mr. ANEURIN WILLIAMS: 42.
asked the Under-Secretary of State for the Colonies whether certain native delegates from South Africa were on the 29th September removed by force or threats from the steamship "Edinburgh Castle" at Southampton; if so, what were the reasons for this removal; and whether any redress is to be given to the gentlemen in question?

The UNDER-SECRETARY of STATE for the COLONIES (Colonel Amery): It is, I regret to say, the case that three members of the South African Native Deputation and another South African native were prevented from sailing in the "Edinburgh Castle." This unfortunate occurrence was due to the dissatisfaction caused among the troops and other pas-
sengers on board by the fact that the four natives in question had been provided with third-class berths while the whole of the rest of the third-class accommodation was taken up by women and children and the troops on board had only hammocks. I understand that the steamship company has disclaimed liability.

Oral Answers to Questions — BRITISH EAST AFRICA (CURRENCY).

Brigadier-General Sir OWEN THOMAS: 43.
asked the Under-Secretary of State for the Colonies whether the golden sovereign is still legal tender to the value of Rs. 15 in British East Africa; and, if so, whether the Government is prepared to make £l Treasury Notes legal tender for the like number of rupees or to consider the advisability of releasing gold for circulation in the Protectorate?

Colonel AMERY: The sovereign is still legal tender for Rs. 15 in British East Africa. I am not at present able to make any statement as to the introduction of Treasury Notes, and I fear that in existing circumstances there is no prospect of gold being available for the Protectorate.

Sir o. THOMAS: 44.
asked the Under-Secretary of State for the Colonies whether, in view of the continued appreciation of the value of silver and of the great financial hardship imposed on plantation owners and East African settlers by reason of the present rate of exchange between this country and East Africa (now 50 per cent, above par rate), he will state whether a commission is at present sitting on this question; if so, of whom is it composed and when its report is likely to be available; and whether the case of East Africa is being considered independently from that of India, in view of the fact that the gold standard is universal in other parts of British Africa and that East Africa, owing to the anomaly of her rupee currency, is thereby placed at a great disadvantage compared with her sister colonies in Africa?

Colonel AMERY: The currency question in East Africa is and has for some time been the subject of discussion between the Colonial Office, the Treasury, and the Protectorate Government. The matter is being dealt with independently of the case of India which is under the consideration of a special commission. I am giving close consideration to the problem, and I
trust that it may be possible to find a, satisfactory solution at an early date. I am well aware of the fact that the present position is most serious from the point of view of the plantation owners and settlers and of the general development of the country.

Oral Answers to Questions — ANTI-DUMPING BILL.

Mr. G. TERRELL: 45.
asked the Prime Minister when the Anti-Dumping Bill will be introduced?

Mr. BONAR LAW: At a very early date; indeed, I hope that it may be possible next week.

Oral Answers to Questions — PRIME MINISTER (ATTENDANCE AT HOUSE OF COMMONS).

Brigadier-General COCKERELL: 46.
asked the Prime Minister whether, with a view to relieve the ever-increasing pressure of work devolving upon the head of the Government and to permit his more frequent presence in the House, he is taking steps to reorganise the various Government Departments into groups, each under a Secretary of State, with power to co-ordinate the work of each group and give decisions having the weight of a Cabinet decision in all matters other than those of major importance?

Major EDWARD WOOD: 67.
asked the Prime Minister whether he has decided on what day, or days, it will be possible for him to attend the sittings of this House at Question Time; and whether, when he is able to attend, it will be possible for him to reply to those questions that are addressed to him?

Mr. BONAR LAW: It would be impossible by question and answer to deal with the system by which the work of the Government is being done, and as regards the attendance of the Prime Minister in thin House, I cannot add anything to what was said by him on the subject last week, including his promise that he would consider the suggestion that he should come at stated times to answer questions.

Major E. WOOD: When will my right hon. Friend be able to announce the Prime Minister's decision as to the day on which he will attend?

Mr. BONAR LAW: I have discussed this matter with the Prime Minister, and he would like things to be left at present, but if my hon. and gallant Friend will put down a question in ten days' time I will give him an answer.

Oral Answers to Questions — SAMOA.

Sir C. KINLOCH-COOKE: 51.
asked the Prime Minister whether in any legislation affecting Samoa promoted by the Dominion Parliament of New Zealand the enactments will be subject to the right of disallowance by the Crown?

Lieut.-Colonel AMERY: I do not understand that legislation to be passed by the New Zealand Parliament in the exercise of its authority over Samoa will be subject to disallowance.

Oral Answers to Questions — EMPIRE TRADE.

Sir C. KINLOCH-COOKE: 52.
asked the Prime Minister whether he will consider the advisability of creating a business league of nations in the form of an Imperial council of commerce for the purpose of promoting and fostering trade within the Empire both as regards raw material and manufactured articles?

Mr. BONAR LAW: I am not quite clear what type of organisation my hon. Friend has in mind, but His Majesty's Government will be glad to consider any scheme for promoting inter-Imperial trade.

Oral Answers to Questions — OLD AGE PENSIONS.

INQUIRY BY COMMITTEE.

Mr. A. WILLIAMS: 54.
asked the Prime Minister whether his attention has been called to the hardship suffered by old age pensioners owing to the rise of prices having been out of all proportion to the increased granted in the rate of pension; whether he is aware that numbers of old age pensioners are obliged to apply to the guardians and are offering to give up their pensions if they are allowed a slightly larger sum in Poor Law relief; and whether His Majesty's Government will take steps to increase the old age pension in proportion to the rise of prices?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The Government will await the Report of the Committee which is inquiring into this question before deciding whether to make any change in the rate or conditions of old age pensions; but I must remind the House that, as I stated yesterday, no provision is made in the Estimates which I have presented to the House for further expenditure under this head, and if further expenditure is undertaken additional taxation will be required.

Mr. WILLIAMS: Considering the almost destitute condition of many of these people, will some arrangement be made so that they may receive from the Poor Law authorities some supplementary allowance while awaiting the Report of the Committee? They can hardly wait till the Committee's Report comes out to get food and clothing.

Mr. CHAMBERLAIN: The question as to Poor Law administration must be addressed to the Minister of Health.

Mr. WILLIAMS: I addressed my question to the Minister who answers questions for the Prime Minister, and I would invite an answer from some Minister who is able to deal with the whole of the subject.

Mr. CHAMBERLAIN: I hope my hon. Friend will not think there was a personal discourtesy intended.

Mr. WILLIAMS: No, no‡

Mr. CHAMBERLAIN: A question as to the Exchequer is clearly one for the Chancellor of the Exchequer, but I must ask the hon. Gentleman to put any question as to the Poor Law to the Minister of Health.

Dr. MURRAY: Are the Government to take no responsibility for this possible addition to the cost of old age pensions and to leave it entirely to the House?

Mr. CHAMBERLAIN: I hope I have not suggested any addition to the expenditure. As long as the Government is in office it will be the joint work of the House of Commons and the Government, but what I want the House of Commons to understand is that if they add charges on the Exchequer they must add to the taxation on the public.

Mr. ROWLANDS: When may we expect the Report of the Committee or are we to wait until next year?

Mr. CHAMBERLAIN: I understand that the Committee is likely to report very shortly.

Mr. DAWES: 97
asked the Minister of Health (1), whether hunger which an old age pensioner cannot satisfy out of his pension or other means is a disease entitling him to receive Poor Law medical assistance, including food, without being thereby disqualified for his pension;
(2) what information he has as to the number of old age pensioners who are suffering hardship owing to the lack of food or comforts; and what steps he is taking to provide an adequate remedy?
(3) whether it has been officially decided by his Department that food, boots, clothing, or other comforts supplied to an old age pensioner by a board of guardians through or on the recommendation of their medical officer who is professionally attending the pensioner, disqualifies the latter for his pension;
(4) Whether he will direct the attention of boards of guardians to the fact that any medical or physical assistance, including food or comforts, supplied by or on the recommendation of a medical officer, does not disqualify an old age pensioner from receiving his pension; and will he instruct all boards of guardians to use their powers in this respect to the fullest extent compatible with the non-disqualification of any old age pensioner?

Mr. PARKER (Lord of the Treasury): The receipt of food and comforts given by the guardians, on the recommendation of the medical officer attending the pensioner, as incidental to medical assistance and not merely for the relief of destitution, does not disqualify for an old age pension. I regret that I have no definite information as to the number of old-age pensioners who are suffering hardship owing to the lack of food and comforts. Boards of guardians are, I feel sure, aware of the provisions of the Old Age Pensions Acts in regard to the medical assistance under which they may give to pensioners without disqualification, and I do not think that it would be desirable to issue fresh instructions pending the Report of the Departmental Committee which has all these matters under its consideration. If my hon. Friend has any definite cases in mind I shall be glad if he will kindly furnish me details of them.

Oral Answers to Questions — EX-GERMAN SHIPS (SCAPA FLOW).

Commander Viscount CURZON: 55.
asked the Prime Minister whether any decision has yet been come to with regard to the disposal of the ex-German ships salved at Scapa Flow; and whether any fresh decision has been come to with regard to those ships which are capable of being raised?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): I have been asked to reply to this question. The answer to the first part is in the negative. The decision rests with the Supreme Council in Paris. In regard to the second part of the question, no fresh decision has been arrived at to salve any ex-German vessels at Scapa Flow other than those which have been already salved.

Viscount CURZON: Is the right hon. Gentleman aware that British ships are now providing manning parties and that they are in a very uncomfortable position with the accommodation very narrow and no light?

Dr. MACNAMARA: The disposal of tie salved ships rests with the Supreme Council in Paris, and I will call the attention of the First Lord to the other point mentioned by the Noble Lord.

Oral Answers to Questions — ALIENS (NATURALISATION).

Sir OWEN PHILIPPS: 56.
asked the Prime Minister whether he proposes bring in a Bill this Session to remedy the well-known defects in the present law with reference to the naturalisation of aliens?

Maior BAIRD: I have been asked by my right hon. Friend to reply to this question. I am afraid I can add nothing the replies given to questions by the hon. Member for Hampstead and the hon. Member for Canterbury on the 20th February and the 10th April respectively.

Oral Answers to Questions — NATIONAL FILM MUSEUM.

Lieut.-Colonel POWNALL: 59.
asked the Prime Minister whether he has considered the establishment of a national film museum; whether steps are being taken to preserve the film pictures taken
of certain actions during the War; and if not, whether some of the profits of the War Office cinematograph committee can be applied in this way?

Mr. FORSTER: My right hon. Friend has asked me to reply. All the official War films (except the Palestine films which are in Sir W. Jury's possession) have been handed over to the War Office and are stored in specially prepared fireproof rooms at the War Office. The question of the preservation of all these films is now under consideration.

Oral Answers to Questions — SPIRITS (SUPPLY).

Lieut.-Colonel POWNALL: 60.
asked the Prime Minister whether it is now possible to remove the restrictions on the amount of spirits going into consumption or, if that is not possible, to increase the quantity from the present figure, three-quarters of the 1916 clearances, to the full amount of 1916; and whether such increase of one-third in the spirits permitted to be cleared would increase the amount raised by the Excise by some £14,000,000 yearly?

Mr. J. PARKER: I have been asked to reply. I am afraid it is not possible at the present moment to remove the restrictions upon the amount of spirits which may be removed from bond, but the question of making some increase in the present figure is now being considered. As regards the last part of the question, it is problematical whether the measure suggested by the hon. and gallant Member would, in effect, lead to any increase in revenue in view of the fact that distilling has only been resumed comparatively recently and stocks are still at a low level.

Mr. TERRELL: May I ask whether the hon. Gentleman can give any reason why these restrictions should not be entirely removed now?

Mr. PARKER: The hon. Member will realise that I am answering in the absence of the Minister.

Lieut.-Colonel POWNALL: 61.
asked the Prime Minister whether he appreciates the hardship of taking 1916 as the basis year on which supplies of spirits are rationed to clubs, in view of the fact that in many
clubs almost all the men of military age had volunteered for active service in 1914 and 1915?

Mr. PARKER: It was necessary for administrative purposes that in bringing these restrictions into force, which was done in March, 1917, the last complete year should be taken as the basic year for the rationing of spirits. The question, however, of modifying the present restrictions is now being considered.

Oral Answers to Questions — FINLAND.

Lieut.-Colonel MALONE: 62.
asked the Prime Minister whether he is aware that the question of granting an amnesty to political prisoners in Finland is being discussed in the Finnish Diet very shortly; whether he is aware that over 60,000 persons have been deprived of their civil rights in Finland, and that large numbers are still in gaol; and whether he will use Ins influence, through the good offices of the Supreme Council in Paris, to ensure the granting of personal liberties to those persons?

Mr. HARMSWORTH: The answer to the first part of the hon. and gallant Member's question is in the negative. With regard to the second part of the question, it has been reported in the Finnish Press that a portion of the Red Army was imprisoned by the Finnish Government in the spring of 1919. In answer to the third part of the question, His Majesty's Government would not feel justified in interfering in the internal affairs of Finland.

Lieut.-Commander KENWORTHY: May I ask if that applies to other parts of the ancient Russian Empire as well as to Finland?

Oral Answers to Questions — FARM BUILDINGS.

Mr. G. TERRELL: 70.
asked the Chancellor of the Exchequer whether the Scottish Board of Agriculture are at present lending money to Scottish landowners at the rate of 4 per cent. per annum for the improvement and rebuilding of farm buildings, the repayment of such capital sums being spread, where desired, over a term not exceeding fifty years; and whether it is proposed to grant similar facilities to English landowners?

The SECRETARY for SCOTLAND (Mr. Munro): I have been asked to reply to this question. My hon. Friend is, I think, under some misapprehension. The loans to which he refers are made to smallholders under the Scottish Small Landholders Act of 1911, and not to landowners. As regards the position of landowners in England, I would refer my hon. Friend to the Parliamentary Secretary to the Board of Agriculture and Fisheries.

Oral Answers to Questions — PRINCE OF WALES FUND.

Mr. R. McNEILL: 63.
asked the Prime Minister whether he is aware that the administration of the Prince of Wales' Fund as a private charity is causing dissatisfaction; and whether, in view of the national character of the fund and of the objects for which it was subscribed, he will consider whether it should be taken over by the Government and administered by a Minister responsible to the House?

Mr. BONAR LAW: The answer to both parts of the question is in the negative.

Mr. McNEILL: Does my right hon. Friend realise that there is no means of knowing how this enormous fund is administered or whether applications for benefit from it are properly considered or not, and will the Government not reconsider whether it should be taken over by them and treated as a real national institution?

Mr. BILLING: Is not the name of the Prince of Wales being used to collect money; and, having regard to criticisms which have been made against the administration of the fund, is it not the duty of the Government to safeguard the name of the Prince of Wales?

Mr. KILEY: Will the right hon. Gentleman make some arrangement so that subscribers to the fund can have some voice as to what will happen with the unexpended balance?

Mr. BONAR LAW: I understand the money was given entirely by private subscribers, but it is certainly the duty of the Government to consider whether or not the fund is being administered properly.

Mr. MACQUISTEN: Why not have a body of trustees appointed?

Mr. BONAR LAW: I have promised to look into the matter.

Sir C. KINLOCH-COOKE: Was this fund provided for the benefit of the civil population, and is it not now being used by the War Office for military purposes?

Mr. BONAR LAW: The answers I have already given show that I am unable to answer these questions.

Mr. MacVEAGH: Is the right hon. Gentleman aware that a similar fund was collected at the time of the Crimean War, that forty years afterwards the Government had to take charge of it, and it has not yet been wound up?

Mr. BONAR LAW: I am aware of what happened at the time of the Crimean War, and it came in useful.

Mr. MacVEAGH: Is the same thing going to happen with this fund?

Oral Answers to Questions — MINISTRY OF RECONSTRUCTION (PUBLICATIONS).

Sir C. KIN LOCH-COOKE: 64.
asked fie Prime Minister whether he will consider the advisability of putting an end to the publication of the series of pamphlets entitled "Reconstructive Problems," and see that the advertisements of these publications issued by the Ministry of Reconstruction are withdrawn; is he aware that thousands of these pamphlets, covered with dust, are being exposed for sale at railway stations; howl many pamphlets have been issued; how many sold; and what is the net loss, if any, on the publication up to 29th September last; will he say if the writers of these pamphlets are paid; and, if so, what is the amount expended on their salaries?

Mr. BONAR LAW: The answer to this question is long and detailed, and I therefore propose, with the permission of my hon. Friend, to circulate it in the OFFICIAL REPORT.
The following is the answer referred to:
I would refer my hon. Friend to the answers given in the House by the hon. Member for Saffron Walden to questions asked on this subject by the hon. Member for Nottingham Central on 12th and 14th August last. To this I would add that the publication of these pamphlets ceased when the work of the Ministry of Recon-
struction came to an end on 31st August. The series consisted of thirty-eight pamphlets, some of which contained more than one part.
All contracts for advertisements terminated on 3rd October, and any advertisements now being exhibited on bookstalls are displayed by the newsagents in their own interest and at their own expense. The pamphlets were issued on sale or return to the newsagents, and it is open to them to return surplus stock. Moreover, in order to assist the sale of such of the pamphlets as are of a more general and permanent interest, instructions were given on the 21st instant which would have the effect of leaving on sale only thirteen numbers. These are likely to be in demand for some time to come. The total number of copies printed is 3,671,450; of these 2,125,900 were placed on sale, the rest being distributed to the War Office and other Government Departments, to public libraries and educational authorities. No figures of actual sales can be given until unsold copies have been returned, but it is estimated that 50 per cent. have actually been sold. The writers of the pamphlets have been paid only in ten cases, the total fees amounting to £178 10s. We are indebted for the remaining pamphlets to eminent experts and Civil servants.

Oral Answers to Questions — COMPENSATION FOR DISTURBANCE (FARMERS).

Major M`KENZIE WOOD: 65.
asked the Prime Minister when the Bill to give compensation to farmers dispossessed of their farms will be introduced; and whether the scheme of compensation will apply to existing notices to quit and to future notices given before the passing of the Bill?

Mr. BONAR LAW: I am not yet in a position to state when the Bill referred to will be introduced, nor the nature of the Bill.

Mr. J. GARDINER: 66.
asked the Prime Minister whether he proposes immediate action to secure in their tenancy farmers who are cultivating their holdings in the best possible manner on estates that have been sold or are being offered for sale, and when notices to quit have been, or are being, served on such farmers; and, if so, will such notices be rendered void?

The PARLIAMENTARY SECRETARY to the BOARD of AGRICULTURE (Sir A. Boscawen): The cases referred to will to a considerable extent be met by the provisions of the Agricultural Land Sales (Restriction of Notices to Quit) Act, 1919. I am not yet in a position to say when further legislation for securing tenants from eviction will be introduced, or whether such legislation will have any retrospective effect.

Mr. GARDINER: Is the right hon. Gentleman aware of the anxiety that exists in agricultural circles, and does he realise the necessity of something being done in order that land should be intensively cultivated, instead of going out of cultivation?

Mr. BONAR LAW: I quite realise the feeling about the matter and the importance of dealing with it quickly. The matter is now under consideration at the Board.

Oral Answers to Questions — EX-KAISER (TRIAL).

Major LANE-FOX: 68.
asked the Prime Minister whether he is aware of the growing feeling in the country against the bringing of the ex-Kaiser to trial and in favour of leaving him to the punishment of his own conscience and the contempt of the world; and whether he will submit the question to a vote of this House, before carrying out this provision of the Peace Treaty, or whether the obligation under that Treaty is so binding upon us as to render such avoidance of it impossible?

Mr. BON AR LAW: I am not aware that the first part of the question correctly represents the feeling of the country, and the Government see no reason why the provisions of the Treaty, which has been approved by the House of Commons, should not be carried into effect.

Mr. BILLING: Will the right hon. Gentleman consider that part of the question which refers to taking a vote, so as to give hon. Members an opportunity of giving evidence of their desire to stand by their election promises?

Mr. BONAR LAW: A vote of the House has already been given.

Mr. HOLMES: Is it still the intention of the Government that the ex-Kaiser should be tried in London?

Mr. BONAR LAW: I can add nothing as to that to what has already been said.

Oral Answers to Questions — LOTTERY LOAN.

Sir C. KINLOCH-COOKE: 71.
asked the Chancellor of the Exchequer whether, in view of the difficulties attending the launching of another Loan on terms sufficiently attractive to ensure success and of the immediate necessity of raising funds to meet our national liabilities, he will consider the advisability of issuing a lottery loan on lines similar to the loan foreshadowed by the French Government?

Mr. CHAMBERLAIN: I listened with interest to my hon. Friend's speech on this question yesterday and to his suggestion that the subject should be reexamined by a Committee of the present House of Commons. As stated by my hon. Friend, the Committee of the last House, after exhaustive inquiry, reported that they were unable to recommend the adoption of this method of borrowing. If there is a general wish in the present -House to reopen the inquiry, I shall offer no objection.

Mr. MACQUISTEN: Is the right hon. Gentleman prepared to take steps to prevent money going out of the country for the French War Loan in the meantime?

Mr. CHAMBERLAIN: Perhaps the hon. Gentleman will contribute to me the suggestions which he obviously has in mind to prevent that.

Mr. MACQUISTEN: I suggest that the best way is to give similar facilities here.

Oral Answers to Questions — CIVIL CONTINGENCIES FUND.

Lieut.-Commander EDWARD YOUNG: 72.
asked the Chancellor of the Exchequer what are the principal purposes for which issues have been made from the Civil Contingencies Fund under the Act of 1919; and when it is proposed that such issues should be repaid to the fund?

Mr. CHAMBERLAIN: The principal purposes for which advances have been made from the Civil Contingencies Fund this year have been in anticipation of Votes for coal mines deficiency and pensions, and of receipts appropriated in aid of the Vote for munitions. The total issues from the Exchequer under the Civil Contingencies Fund Act, 1919, during the current financial year have been £60,500,000, of which £20,000,000 have so
far been repaid to the Exchequer. I hope that the greater part of the remainder will be repaid before 31st March, 1920. As the hon. Member is aware, the latest date for repayment under the Act is 30th September, 1920.

Oral Answers to Questions — INLAND REVENUE DEPARTMENT (ACCOUNTANTS).

Major D. DAVIES: 73.
asked the Chancellor of the Exchequer if he will state the nature of the duties to be performed by the new accountants in the Inland Revenue Department which makes it necessary to restrict, these appointments to candidates who are members of certain societies; and whether, in view of the effect upon a number of public accountants with wide experience and practical ability in every branch of their profession who are not members of the specified societies, he will reconsider his decision in the matter?

Mr. CHAMBERLAIN: The accountants in, question are required to advise upon questions involving the most expert accountancy considerations which are outside the range of the general work performed by the Board's officers, and it was necessary on this account to restrict the field of choice in the manner indicated. I may add that these posts, few in number, have all been filled.

Oral Answers to Questions — INCOME TAX.

DEMOBILISED SOLDIERS.

Mr. T. THOMSON: 74.
asked the Chancellor of the Exchequer if a soldier who was demobilised before 5th April, 1919, is less favourably treated as regards abatement allowance on Income Tax than one who was demobilised after that date; and, if so, whether he can see his way to extend to the former the abatement of £160 for the first year after demobilisation granted to the latter?

Mr. CHAMBERLAIN: I would refer the hon. Member to the answer given on the 29th instant to the hon. Member for Morpeth in reply to a similar question. I am sending the hon. Member a copy.

AGRICULTURAL LAND.

Mr. A. HENDERSON: 76.
asked the Chancellor of the Exchequer if he will state the total amount of Income Tax paid
in respect of the occupation of agricultural land, inclusive of house and buildings, in 1913–14; and the total amount payable in the current year?

Mr. CHAMBERLAIN: The total net produce of the Income Tax under Schedule B in respect of the occupation of land was £189,563 for 1913–14. For the current year it is estimated that the corresponding figure will be £8,300,000. Separate figures relating to agricultural land are not available. The right hon. Member will recollect that, apart from the increase in the rates of Income Tax, the basis of assessment under Schedule B was one-third of the annual value for 1913–14, whereas for the current year it is twice the annual value in the case of lands occupied for the purpose of husbandry and in the case of other lands the single annual value.

BRITISH CHAMBERS OF COMMERCE.

Mr. JAMESON: 77.
asked the Chancellor of the Exchequer whether his attention has been drawn to the resolution passed by the Association of British Chambers of Commerce Taxation Committee and submitted to the Royal Commission on Income Tax by Sir Algernon Firth, baronet, ex-president of the Associated Chambers and president of the Federation of British Industries, to the effect that the Government may be assured that, if heavy Income Tax is unavoidable, the commercial community will shoulder the burden?

Mr. CHAMBERLAIN: The answer is in the affirmative.

SUPER-TAX (GRADUATION).

Mr. JAMESON: 78.
asked the Chancellor of the Exchequer whether his attention has been drawn to the representation made to the Royal Commission on Income Tax by Mr. H. Lakin-Smith, Chairman of the Finance and Taxation Committee of the Birmingham Chamber of Commerce, to the effect that, in the opinion of the Association of British Chambers of Commerce, graduation of Super-tax should not stop at the £10,000 point as at present, but should be extended so that an income of £50,000 should in future be taxed at a higher rate than one of £10,000; and whether he is prepared to adopt the suggestion?

Mr. CHAMBERLAIN: I would refer my hon. Friend to the reply which I gave to
his question on the same subject on the 18th August. The Royal Commission on the Income Tax is still hearing evidence, and the position remains as indicated in my previous reply, to which I cannot usefully add anything.

Oral Answers to Questions — SPIRITS (CLEARANCES FROM BOND).

Major NALL: 75.
asked the Chancellor of the Exchequer whether he is aware that spirit merchants, whose business declined in 1915–16 owing to their absence on military service, are at a disadvantage compared with those who carried on at home if their present clearances from bond are only allowed on the basis of their 1916 clearances; and whether lie will arrange for those who have now resumed business to be allowed clearances on their pre-war basis?

Mr. CHAMBERLAIN: I am aware that in some cases the trade of a spirit merchant in the standard year 1916 may have declined from the average of previous years owing to the cause stated in the question, but I understand it is the practice of the Commissioners of Customs and Excise, where any such case is brought to their notice and evidence produced to their satisfaction that the decline of trade in 1916 was due to the absence of the principal on military service in that year, to give directions for the issue of a special authority for the clearance of additional supplies.

Major NALL: Is the right hon. Gentleman aware that in some cases the Commissioners are not doing that?

Mr. CHAMBERLAIN: No, I am not aware of that. If the hon. and gallant Gentleman desires special individual cases to receive inquiry, perhaps he will either himself communicate with the Board of Customs or communicate with me, and I will send them for consideration by them.

Oral Answers to Questions — DEMOBILISATION.

WINDOW CLEANING.

Sir W. JOYNSON-HICKS: 79.
asked the First Commissioner of Works whether he will direct that all such employment as outside window-cleaning, which is admirably adapted for discharged soldiers.
should as far as possible be given only to firms who employ large numbers of such men; and whether the Silver Badge Window-Cleaning Company have had an opportunity of carrying out tenders for such work?

Mr. PARKER: I have been asked to answer this question. Window-cleaning in Government buildings is the subject of competitive tendering, and, apart from the general appeal of the Government to employers, no steps have been taken to secure the employment of ex-Service men. Inquiries, however, show that a very high proportion of such men are employed on the Government window-cleaning contracts. The Silver Badge Window-Cleaning Company were invited recently to tender in connection with a specific building, but their tender proved to be too high for acceptance.

Oral Answers to Questions — ANTI-BRITISH PROPAGANDA, UNITED STATES.

Mr. HIGHAM: 83.
asked the President of the Board of Trade if he is aware of the anti-British propaganda now being carried on in the United States, and what steps, if any, the Government is taking to counteract this propaganda, particularly in view of its effect on the sale of British-made goods in that country?

Mr. HARMSWORTH: I have been asked to take this question. The answer to the first part of the question is in the affirmative. With regard to the second part, I would refer the hon. Member to the reply which I gave to a question on this subject by the hon. Member for Keighley on the 28th instant.

Oral Answers to Questions — COAL SUPPLIES.

PRICES.

Sir O. PHILIPPS: 83.
asked the President of the Board of Trade whether his attention has been drawn to the fact that the Coal Control Department are discriminating unfairly between different taxpayers in the price at which coal is being sold to them; and whether he will at once take steps to see that this abuse is remedied, arid that British taxpayers purchasing coal in Great Britain for consumption by British subjects are treated with absolute impartiality?

The PARLIAMENTARY SECRETARY to the BOARD or TRADE (Mr. Bridge-man): I presume that my hon. Friend refers to the prices charged for bunker coal. I would point out that coal for use on any ship was excluded from the benefit of the Price of Coal (Limitation) Act, which was passed in 1915, for the purpose of limiting the price of coal for inland consumption. My right hon. Friend indicated in the House on Monday, however, that the question of restricting bunker prices is at present receiving his careful consideration.

Sir O. PH LIPPS: Are we to understand that this question is likely to receive prompt attention?

Mr. BRIDGEMAN: As prompt as possible.

Oral Answers to Questions — RAILWAY FARES.

Sir PHILIP MAGNUS: 87.
asked the President of the Board of Trade whether, having regard to the fact that railway fares are not likely to be reduced, he can arrange that the tickets shall be stamped with the fare actually charged for the journey, in order to avoid the difficulty of rapidly calculating the exact fare to be paid, and the amount of change to be received?

The MINISTER of TRANSPORT (Sir Eric Geddes): The point raised has been considered in the past, and as explaind in a reply on the subject given to the hon. and gallant Member for the Milton Division of Leicestershire on the 21st July, many of the railway companies had considerable stocks of printed tickets which it was undesirable to waste. I am, however, consulting the railway companies on the matter.

Oral Answers to Questions — HOUSING.

BATHROOMS (NEW PREMISES).

Mr. T. THOMSON: 94.
asked the Minister of Health if he can reconsider his decision insisting upon the bathrooms in some of the new houses being in the scullery or downstairs when the local authority wish to place them upstairs?

Mr. PARKER: I have been asked to answer this question. The position of the bathroom is primarily a question for the local authority. It is not the practice to insist upon the placing of the bathroom
downstairs if an economical upstairs arrangement can be provided in the type of house which the local authority desire to erect.

Mr. THOMSON: Am I to understand that if the local authority insist upon the bathrooms being placed upstairs the Minister of Health will not overrule their decision?

Mr. PARKER: The hon. Member had better give notice of that question.

Mr. THOMSON: 'That is the question on the Paper.

Mr. SPEAKER: If the answer is not clear the hon. Member had better put down another question. The hon. Member (Mr. Parker) is only answering on behalf of another Department.

Oral Answers to Questions — RAILWAY STRIKE (VOLUNTARY WORKERS).

Mr. SWAN: 95.
asked the Minister of Health whether the machinery of local authorities was employed in the enrolment of volunteer workers in connection with the recent railway strike; whether local authorities have any statutory power to act in such a matter; whether the costs incurred for publicity, etc., in this connection will be defrayed from the rates; and, if so, on what authority?

Mr. PARKER: The Ministry of Health have no information on the matter referred to in the question.

Oral Answers to Questions — SILVER.

NEW ORDER IN COUNCIL.

Sir SAMUEL ROBERTS (by Private, Notice): asked the Chancellor of the Exchequer whether his attention has been called to the fact that the price of silver in the London market yesterday was 66½d., and that the melting value of the silver in British subsidiary coinage is 66d., and what steps the Government propose to take in this matter?

Mr. CHAMBERLAIN: This matter has been engaging my close attention. By Statutory Orders already in existence it is an offence—(a) to hoard current British silver coin as defined in Defence of the Realm Regulation 30EE. (b) to buy or sell,
or to offer to buy or sell, any current British silver coin at above its face value, as provided in the same Regulation.
By an Order in Council under the Defence of the Realm Act passed yesterday amending Regulation 30E it was made an offence to melt down current silver coin or to break it up or to use it otherwise than as currency. The export of British silver coin is already prohibited, and steps are being taken to renew the prohibition on export of silver bullion except under licence. The situation is being carefully watched, but I hope that it w ill prove unnecessary to take any further action.

Mr. MACQUISTEN: Are measures being taken to prevent money going to the French lottery?

Mr. CHAMBERLAIN: No, Sir.

Oral Answers to Questions — GERMAN WINES (HOUSE OF COMMONS).

Mr. BILLING (by Private Notice): asked the Chairman of the Kitchen Committee whether it is a fact that his Committee have decided to purchase German wines from German agents in London and Germany for the consumption of Members of the House of Commons, and whether, for the satisfaction of Members of this House, he will state what are the grounds for arriving at that decision?

Sir JAMES AGG-GARDNER: his true, as stated in the question. A desire having been expressed by various Members—[HON. MEMBERS: "Names‡"]—for the wines referred to in the question, and, there being no legal objection, it is obviously the duty of the Committee to supply the wines.

Mr. BOTTOMLEY: May I ask whether perhaps the Committee in adopting this policy had in its mind the fact that this might be one of the most agreeable methods of helping Germany to pay the indemnity?

Sir J. AGG-GARDNER: I think it is SO.

Sir R. COOPER: May I ask if this, is the "considered policy" of His Majesty's Government?

Sir J. AGG-GARDNER: I have not had an opportunity of consulting the Government on this matter.

Mr. BILLING: Is it not a fact that the Chairman of the Kitchen Committee proceeded to Germany to acquire these wines, and does he consider that in his official capacity he is setting a good example to the House of Commons by providing means for its becoming alcoholic on German wines?

Sir J. AGG-GAR DN ER: I did not go to Germany for the express purpose of buying wines, but to visit the occupied areas.

BUSINESS OF THE HOUSE.

Sir DONALD MACLEAN: May I ask the Leader of the House whether lie can tell us what business he proposes to take next week, and if it is intended to sit on Friday?

Mr. BONAR LAW: We propose that the House should sit to-morrow and take the Rats and Mice Bill, the Constabulary and Police (Ireland) Bill, the County Court Judges (Retirement Pensions and Deputies) Bill; the War Emergency Laws (Continuance) Bill, Financial Resolution; the Land Settlement (Scotland) Bill, Financial Resolutions;
Monday, the Aliens Bill, Report;
Tuesday, the Agriculture and Fisheries (Councils, etc.) Bill, Second Reading; and other Orders.
I hope that after dinner the Adjournment will be moved in order that the subject mentioned yesterday, the appointment of the new Coal Controller, may be discussed.
On Wednesday, Supplementary Army Estimates will be taken.
With regard to Thursday, I would rather not say until Monday what the business will be, as it has not been quite decided.
On Friday, we propose to allow the National Assembly of the Church of England (Powers) Bill to be considered.

Mr. TERRELL: On what day do the Government propose to take Anti-dumping Bill?

Mr. BONAR LAW: On Wednesday we hope to introduce the Bill, but there can be no question of a Second Reading.

Sir P. MAGNUS: Will the Report stage of the Aliens Restriction Bill be completed on Monday?

Mr. BONAR LAW: It is hoped that the Report stage will be completed on Monday.

Lord R. CECIL: Will the discussion on Russia be taken on the Supplementary Army Estimates?

Sir D. MACLEAN: Will Mr. Justice Younger's Report be available, say, on Saturday, so that it may be used in Monday's Debate on the Aliens Restriction Bill?

Mr. BON AR LAW: My right hon. Friend the home Secretary promised yesterday to have it circulated as soon as lie could get some verbal observations from Mr. Justice Younger. I will see at once that steps are taken to have it made available.

Orders of the Day — FINANCE.

Order read for resuming adjourned Debate on Question 29th October],
That this House, realising the serious effects upon the trade and industry of the nation of the enormous financial burdens resulting from the War, promises its hearty support to the Government in all reasonable proposals, however drastic, for the reduction of expenditure and the diminution of debt."—[Mr. hamberlain.]

Questioln again proposed. Debate resumed.

Mr. CLYNES: I beg to move to leave out from the word "burdens" to the end of the Question, and to add instead thereof the words
at present pressing upon the country, declares that the present national expenditure on war services is unjustifiable, in view of the period which has elapsed since the signing of the Armistice, and is of opinion that steps should be taken at once to effect more drastic economies; further, measures should be adopted to meet the present financial burdens and assist in liquidating the National Debt, such measures to include the imposition of a levy on capital and the reversion to the State of fortunes made as a result of the national emergency.
The newest of the Members of this House, and therefore the most artless among us, will not fail to discern some gleam of humour in the Resolution which has just been read from the Chair, for in it the Government is asking the House to give its support to measures, however drastic, to reduce expenditure and diminish the National Debt. The fact is that the Government has recognised the necessity of having this Debate, because of the great clamour in the country and the state of fear possessing the minds of the people in relation to our expenditure and our industries. and because of the very heavy burdens which the financial position imposes on the commerce and industry of the country. The House of Commons has been for a considerable time appealing to the country upon the subject, and eventually it has been able to exert its influence upon the Government sufficiently to persuade it that it is necessary to discuss this great question and the circumstances arising out of it. We heard yesterday one of the most skilful speeches ever delivered in this House, but there was not in that speech any indication of a policy or plan to reduce expenditure or diminish the heavy burden of debt which has been the theme of every speaker who has so far risen. It
is. all very well to say that incidentally, and in the ordinary way of automatic operation, there would be a reduction, there would be a decrease in certain items of expenditure. But there was nothing to indicate any development or improvement of policy which would materially improve the financial outlook of the country. I therefore join with other Members who have appealed to the Chancellor of the Exchequer to reconcile his utterances of yesterday with his gloomy pronouncement and forebodings in August of this year. For the fact is that expenditure for the first year of peace, as that expenditure has been estimated, is greater than it was in the first full year of war.
That surely is nut a situation which should provoke the optimistic outlook and the cheerful utterance of the Chancellor of the Exchequer yesterday! It would appear from that speech that the worse the financial situation becomes the more cheerful we find the Chancellor of the Exchequer. His optimism and his pronouncement yesterday go far to cancel his appeals for economy, and tend, indeed, to create in the country the conviction that, bad as the position is, it is not too bad to be overcome by proceeding on the lines that have so far been laid down. Our view is that the financial situation is so extraordinary as to call for extraordinary measures, and it will not do merely to call for drastic action on Motions. Drastic action is required, and no hint whatever was given in either of the speeches we had yesterday of any action which would justify the terms of the Motion put down in the name of the Government. Possibly to-day at some later stage of the discussion we shall hear something from the Prime Minister on points of policy. But if we are to have any announcement of the drastic measures which it is intended to take in giving effect to the language of the Resolution, it must be in conflict with the utterances of the Chancellor of the Exchequer yesterday. In short, the whole case against the Government on the question of finance is the financial position itself, with which no member of the Government who has spoken has so far dealt.
My right hon. Friend (Mr. Henderson) who spoke yesterday put certain points to the Prime Minister to which I want further to draw his attention, and as to which we are entitled to an answer, because it cannot be alleged against, us that we are seeking to take advantage of the Government, now that the War is over and
because of the financial situation being so serious as it is. My right hon. Friend pointed out that in the beginning of 1918, before the War was brought to an end, we approached the Prime Minister and received no more than an acknowledgment.
4.0 P.M.
In the middle of that year we repeated our appeal and suggested a definite course of effective inquiry which would allow us to ascertain what our actual commitments were and what were the full financial resources of the country with a view to meeting our obligations. So that we did seek an inquiry, in which I assume we should have had an opportunity to play our part and to contribute such items towards a solution of this great national situation as we possibly could. But there has been no response and no reply beyond the mere formalities of an answer, as my right hon. Friend complained. Yesterday, in addition to the speech of the Chancellor of the Exchequer, we had a speech from the Secretary of State for War. I should have been inclined to describe his speech in the adjectives which he himself applied to that of the Chancellor of the Exchequer, had he left me free to do so—
Massive and masterly speech of the Chancellor of the Exchequer
said the Secretary of State for War. I am sure all Members of the House who heard the speech of the Secretary of State for War would regard it as not only skilful but masterly in its reasoning. It would appear that he was able to take away block after block of the millions of expenditure which lay to the account of his own Department, until really it seemed that the country owed him something for running his Department. That is only first-class speech making, and is not suggesting any solution of this serious and lamentable situation. It is seeking merely to govern by phrases and to delay season by season and month after month the advent of a plan to meet the position of disaster and bankruptcy referred to by the Chancellor of the Exchequer when he addressed the House in August last. I would ask those two Ministers to reconcile for us the opposite statements which both of them made. The Chancellor of the Exchequer indicated that the cause of the heavy cost which had been incurred by the Army during six months of peace was the fact that the Army had to be kept in being because it might have been required even to go as far as Berlin. The argument of
the Secretary of State for War was that the cost so far incurred by his Department was due to the process of demobilisation and the desire to get men out of the Army as quickly as they possibly could. The speeches of both right hon. Gentlemen with reference to Army charges were, I submit, utterly unconvincing. Germany and her associates were so completely beaten, morally and militarily, that there could be no cause to keep in being such a large and costly military force as was kept in being until a few months ago. Every Member of this House must have received during recent months dozens or scores of letters from his constituents submitting to him individual cases of men who could very well be liberated from the Army at very considerable financial relief to the State and, incidentally, at considerable advantage to the industries and the commercial needs of the country. We are tired of appealing to the War Office and to the Secretary of State for War to deal with individual cases which have so repeatedly been submitted. The form of answer is well known to us. We get every week copies of the same form, and it announces to us that So-and-so's case does not come within the Regulations, and tout the Secretary of State for War regrets that no action can be taken in the matter. This is a matter in which we ought to make the Regulations fit the needs of the community and of the individual cases. I shall cite one case only as an instance, because it came into my hands yesterday. It comes from my native city. I can give the right hon. Gentleman all particulars as to the name and place, but I will only give now the substance of the case. The writer says:
The work of this soldier is to remove refuse and to burn it along with others. This work is costing the Government about £30 a month. The man has been applied for on five different occasions, but it is of no avail. He owns a one-man business which is being ruined by his absence. His sister is entirely alone and is dependent upon voluntary help and only on that account able to keep the shop door open.
That is not an isolated case. It is typical, I am certain, of many thousands of cases of men who are in Ireland, of men who are in France, or of men who are in the more remote theatres of war or where war has been. At a moment when we are told. repeatedly that every penny counts, and when the Prime Minister himself is driven to make what reads to me like a frantic appeal for drastic steps to be taken in every branch of the Civil Service to cut
down expenditure, it seems that some more serious consideration should be given to this large number of cases of men who could be liberated to the advantage of the State and, incidentally, to the commercial and trading benefit of the community.
We were asked in the course of yesterday's speech to apply our attention to one or two definite matters under the head of which we might be able to suggest economies. My right hon. Friend who spoke yesterday did, I think, give two or three instances. I may not be able to speak for every member of my party on these benches in regard to certain things I may say on the question of subsidies. I do not think a man is ever the less a friend of his party by being frank in respect of his own opinions. I have never regarded the policy of subsidies as being either good for sections of the community or for the State as a whole, and just as I want to see trade unions run upon business-like lines, so do I also want to see a community running its business and the State running its Departments and its work of government upon Fines that will compare with any commercial undertaking. I well know that during the latter stages of the War, when prices ascended so severely and when the cost of bread became so heavy, we, by common consent, without regard to person or party, looked upon a bread subsidy as a necessary war measure for the moment. I think the House raised very little objection to that being done. Personally, in Labour meetings, conferences, and in other parts of the country later on, I resisted several proposals that were made to extend the principle of subsidies to other foods and to other articles of daily need. While there is need to give assistance to those who require it, surely methods can be devised whereby that assistance can be given without expending millions of money in subsidising people who are not in need of it ‡ I put the view to-day that the bread subsidy, for instance, costing, as it now does and as it has done for some considerable time, £50,000,000 a year, is to the extent of at least two-thirds of it, money paid to people who are well able to pay the market price of bread. What could the Government have done in order to have given relief to those who needed it, that is, the people with very low wages? What can we even now consider with a view to assisting only those who are actually in need? I suggest that the masses of the lower-paid wage earners, by even only an
advance of Is. each on their wages, which the Government could very easily bring about, would be able to cover fully whatever they now save through any Government subsidy on their bread, and that that would in itself save a very large sum, certainly between £20,000,000 and £30,000,000 a year, in the case of the subsidy now paid to those who do not need to have their bread cheapened by any kind of Government. dole. The poor wage earners, I am sure, would prefer to have some slight increase in their wage, so as to enable them to pay the ordinary market price for their daily needs, rather than to continue to have their bread subsidy at such a ruinous cost to the country as is now being incurred.
I would like to touch upon a kindred point in regard to the unemployment benefit, though here I join with my right hon. Friend the Member for Widnes in warning the Government as to the consequences of any immediate or early cessation of relief under this head. It is a policy to which the Government has committed itself without due regard to the alternative methods that were frequently suggested from this side of the House. The unemployment benefit and the bread subsidy must amount to somewhere about £100,000,000 a year. I am taking into account not what has actually been paid for the moment in connection with unemployment, but what surely must be paid before the last dole will be received. It is not likely that the two put. together will come to less than £100,000,000 roundly. The view put from this side of the House repeatedly in the earlier part of the Session was that what the workers wanted was work. Simple as it may seem, our solution of the problem of unemployment is to find employment for those who want it. It is wasteful and demoralising to pay people, even poor people, any money for doing nothing. We know its effects upon character and upon industrial efficiency. As a temporary device for some momentary emergency it can be forgiven, but as a policy to be continued so long without some effectual alternative being proposed, no excuse which I can think of can be discovered for it. We say, therefore, that it is the business of the Government, in view of the exceptional situation created, to use their machinery, their establishments, their apparatus, their premises, their authority, to find people work, and additional need for that simple step lies in the fact that there is a constant demand
for increased production. But it was said to us that any attempt on the part of the State to organise businesses or trades or industries could not commercially be successful. I do not mind granting that. If that is the strongest argument against our plea I grant that it is probable that certain businesses or trades to which people could be put would be worked at a loss. But then there is the difference between sonic loss and all loss. At present you lose everything. You have the double loss of a financial loss, together with the loss in character, in conduct, and in the general industrial situation, so that it means that under the plan we have suggested there could be only some loss instead of a complete loss. Until the markets of this country and the private employers can fulfil their function of finding work for those who want it, it is the. business of the Government to step in. If it is not the business of the Government to step in to find the work, it is not the business of the State to find unemployment benefit. Either they should leave the whole thing alone or undertake fully the responsibility in respect of the failure industrially of private employers to meet the degree of demand which there is for employment.
One hon. Gentleman in addressing the House yesterday put a view which, after my own experience in the early part of the day, simply astounded me. The hon. Gentleman said:
I have come to-day from a meeting of our Executive Council of British Chambers of Commerce. I never heard one of those representatives of the 110 great towns of England say anything that looked like timidity or fear. They were full of orders, full of hope, full of enthusiasm.
I quote that statement because it was so warmly cheered when the hon. Member made it. Yesterday I spent most of the forenoon in an adjacent building taking part in an arbitration case affecting some hundreds of thousands of workmen in all branches of the engineering trade—labourers, general workers, and the higher skilled men—and I listened to the employers' arguments in response to our own. The burden of their case was depression, unemployment, lack of orders, closing down, inability to meet their shareholders with any dividend or a case that would give satisfaction. Are we to hear in this House, when we put forward the plea for more taxation and for special measures and for unusual forms of taxation to meet an unusual situation—are we
to hear these accounts not only of the oncoming, but of present prosperity and well-being, and yet, whenever we ask for a slight advance in the wages of workmen, are we to be told how gloomy is the outlook and how impossible it is, owing to the lack of orders and employment, to meet any of the claims we make'? It may be that on the question of production I shad not find all I may say fully in keeping with the utterances of some of my Friends. Indeed, I lament to find that some men of influence and authority in the Labour movement are not treating this question of production with the seriousness which it deserves. I am not in the least disturbed as to whether employers of labour or men in commerce benefit by increased production. My primary motive in suggesting that there is a need for increased production is to bring about cheaper commodities for the mass of the people. The more you embarrass the profiteer the more difficult you make it for those who take advantage of a hardened market to drive a hard bargain. I say freely, indeed—all history and experience teaches us—that it is natural that the mass of workmen should be suspicious in this matter of production, for in former years over-production was sometimes the cause of unemployment, trade depression, and reduced wages. My view now is that with the present state of working-class organisation, with the position they have attained of authority in the State, and in their strength relative to the commercial and employing classes, they need never again fear any condition of unemployment or reduced wages resulting from increased production, and they can make efficiency in work, improved methods of production, better timekeeping, greater individual industry—so far as it can reasonably he called for—they can make all these things extremely helpful to themselves as a class, without necessarily being of any personal benefit to individual employers. I therefore agree with the appeal of the Chancellor of the Exchequer; but I say that he will not find a hearty response from masses of the workmen to his appeals for increased production except upon two conditions. One is that the workers have the assurance that they are to have their share by improved wages and a higher standard of living, and the other is the guarantee, however it may be given, either in combination with the employers or collectively with the State,
that any improved exertions on their part or improved output shall not he the cause of unemployment or personal suffering.
The Chancellor of the Exchequer yesterday went at least the length of agreeing to some inquiry in respect of one point about which we hear, perhaps, more in the Press and on the platform than in this House. That is the point of the enormous private gains that resulted incidentally and inevitably to certain men in trade and business from the artificial conditions under which, in time of war, trade is conducted. I understand there is to be some Select Committee of Inquiry to ascertain the difficulty and to explore the probabilities of some action being taken in this matter. I do not think that the right hon. Gentleman's inquiry ought to stop there. We. have repeatedly urged on the Chancellor of the Exchequer the need for at least inquiring into the question of a Capital Levy. It may be not so literally a levy upon capital as a levy upon accumulated wealth. There are three things into which the Chancellor of the Exchequer should agree to inquire. We are well aware of his personal commitments—and yesterday we were reminded that he pledged himself so definitely against a Capital Levy that if this House ever resolved upon applying it, it could not expect him, as Chancellor of the Exchequer, to be the medium of it—but really that should not prevent the Chancellor of the Exchequer from consenting to an inquiry. It would not commit him as Chancellor, and I hope it would not strain unduly his high sense of public duty if he were -to consent to this question of a Capital Levy being also made the subject of expert inquiry.
Again, why should there not be an inquiry into the question of production. I suggest an inquiry upon all these things because upon all three there is very real controversy, very deep and sincere difference of opinion, and in the case of some of them very real suspicion in the working-class mind. I believe that this House could make itself the instrument of revealing the facts and exploring the possibilities of some effective national action. On the question of war profits all hon. Members who have addressed their constituents or meetings elsewhere know how angry, how indignant is the response of a meeting to any reference to those who have either intentionally or incidentally benefited financially out of their business
or enterprise because of war conditions. I observed that not very long ago, I think it was the War Office, gave a ruling which might very well be taken as a pattern of action for the Government as a whole.
In connection with the claim made by the local authorities in the Slough area for a sum of revenue from the War Office because of increased rate, the answer came from the War Office that it had been decided by the Lords of the Treasury that it was not proper that local rates or local authorities should reap any advantage out of the national emergency and they decided that they could not pay the increased rates. If it be right and proper for one Department of the Government to refuse a financial benefit which has accrued because of the conditions of war, it must be equally right for this House to take such action as will prevent any individual from reaping such a large financial benefit as many of them did reap. I claim, then, that under the heads of war profits, capital levy and production, all the facts have not been revealed, and clearly this enormous debt, approaching now some £8,000,000,000, is really too big and staggering a burden to hold out to us any hope of our being able to wipe it out or materially to diminish it by the ordinary processes of taxation.
If the proposal is not deemed to be worthy of inquiry even, we are at least entitled to call for an alternative. What is this step which the Government propose to take? What are the drastic measures which we hope the Prime Minister will later on be able to announce and on which he calls for support in order that the National Debt should be diminished and expenditure curtailed? I have heard already over a period of some years many, not all, of the arguments usually adduced against methods of taxation. The poor man, like the rich, complains that the burden falls on him. There is cause to extend greater sympathy to the poor man under the use of this argument than to the rich. But having examined all these arguments against a Capital Levy, I cannot think of one which at some time or another has not been used against any form of taxation ever proposed in this House. Indeed, all of these things were said-in the course of the discussions on the first Factory Act, and throughout the history of industrial legislation there have been prophecies that industry would be destroyed and crippled, and that individuals would find themselves driven
into bankruptey. All these pictures were painted to serve the purposes of a deterrent, but when Parliament insisted on the changes, it was seen how unfounded were the fears. A hundred years ago in this House somebody for the first time proposed a limitation in the working hours of children in the Lancashire cotton factories. The proposal was to the effect that children, nine years of age, were not to be worked for longer than twelve hours a day. We have travelled far since those times, and now grown-up men are asking not only for a seven-hour but for a six-hour day, and industries, trades, and businesses are already adapting themselves to meet these demands for improved standards. I would say to the Chancellor of the Exchequer that he ought not to apply the standard of those old, hoary, worn-out arguments to the new situation. Experience has proved how anticipated difficulties have been overcome by the action which Parliament has taken.
Let me try to express in a phrase what the working man feels about this proposal which we make for a Capital Levy and for war profits. I hope I shall do it without offence. I am among those who have, on working-men's platforms, scores of times acknowledged the nation's great indebtedness for the services rendered to it by the upper and middle classes in connection with the War. There was no compulsion which brought many of them in the earlier days of the War to a soldier's grave. Like their poorer brethren, they did their best in the War, and I do not think so low of human nature as to believe that men of that class who were willing to offer their lives will withhold their wealth if they think that the call for it is really based on national needs, and if they find a case can be adduced which justifies the State in making a demand for it. Men who offered their lives will not dishonour their records by withholding their wealth if it is within their power to give it. The workman takes this view. As poor men, he and his fellows were called upon by the State to give as much as the rich man. The rich man could give to his country no more than his life, and the poorest man did the same; hundreds of thousands of them are now lying in France and elsewhere. These poor men say that if it was right for the State to call upon them to come forward and save their country physically, then it is right for the State now to call upon
wealth to come forward and save the country financially. We have got past the point of physical action.
We shall not get over these great bulwarks of financial difficulty by fine phrases. We shall not level them down by merely cherishing hopes which cannot be fulfilled. This debt is real. A hundred million pounds are being paid every year, greatly to the credit of this nation and incidentally to that of the Minister of Pensions, to those who did physically their share in the War and to those who have been left crippled or bereft of the breadwinner, because he was called to defend his country. A hundred million pounds is a very big sum, but it is only one quarter of the sum which annually we must find in interest to meet the burden of this debt to the working man. Compare these two figures, and it will be well for the state of the country and for its peace, and for the securing of a better future, that we get a frame of mind more composed and contented, and thus prevent the working classes from believing that there is any ulterior motive behind our action on this question of finance. If the Chancellor's speech yesterday is justified, we have within our nation means financially to diminish, if not to soon entirely wipe out, this burden. If we have not, then that speech should never have been made, for very soon we shall find, when we get another Budget, the Chancellor of the Exchequer probably appealing for some more sacrifices very largely from people who can little afford them. This is a sacrifice where only money is wanted, where only a financial sacrifice is called for. Poor people cannot bear any heavier financial sacrifice, and as they bore whatever physical sacrifices the country was entitled to call for they are n0W at least right in turning round to the Government and asking that this burden shall be lessened or altogether removed by effective measures on the lines of the Amendment which I have now the honour to move.

Lord ROBERT CECIL: We have listened to a speech which I venture to think has provoked a very large amount of agreement and sympathy with the views it expressed. As far as I am concerned, I feel in rather a difficulty. I had hoped to speak after the right hon. Gentleman with a view to answering him, but I find myself in almost complete agreement with him. There are very few criticisms I can
make. As to his views about subsidies generally, of course I am in entire agreement with him. But when he said it was the duty of the Government to find employment for everybody, while I quite agree that is a very desirable thing to be done, I am bound to point out that the difficulties of the operation are enormous, as I have no doubt the right hon. Gentleman himself will recognise. To find employment at a rate which is not commercially sound is almost as bad as to give direct subsidies, and it also has a serious effect in upsetting the other persons who are engaged in that particular branch of industry. With regard to what the right hon. Gentleman said about output, again I find myself largely in agreement. I am quite sure that if you are really to increase output and to get back to satisfactory industrial conditions you must recognise the demand of one of the right hon. Gentleman's colleagues that a workman must have a different status given him—the status not of an employé but of a partner. I believe that is a perfectly sound principle, and it must be the basis of industrial legislation if it is to be really effective.
On the question of the Capital Levy I think all of us were impressed by the appeal at the end of the right hon. Gentleman's speech. But let me assure him that those who are doubtful about the wisdom of a Capital Levy are not. doubtful because they grudge contributing whatever is necessary for the upkeep of the State. It is not that at all. I know it is not that, at any rate in a number of cases with which I am personally acquainted. Their doubts are as to the wisdom of the tax, and whether in point of fact it would not produce more harm than good. I have no feeling against a Capital Levy as such. I do not regard it as bad in principle or as confiscatory, or anything of that kind. If a landowner succeeds to an encumbered estate he may do one of two things. He may go on paying the interest on the mortgages that exist or he may sell part of the estate and pay off the mortgages. But those two operations are merely matters of business. It is a question of which will on the whole be best for his financial prosperity. It appears to me that is precisely the issue which is rotated here. I hope very much that nothing rash will be done in this matter. The right hon. Gentleman said with great truth that, according to history, when-
ever any new tax was being proposed, all sorts of evils have been prophesied. That is quite true, and people have prophesied them because they feared dangers much greater than those which were afterwards proved to exist. It is also true that every new tax does do harm. The moment you make a change in the means by which you collect money you are sure to cause a certain amount of dislocation, and the newer the change the greater will be the dislocation. That is really what people mean when they prophesy evils which may result from a Capital Levy.
As to the substance of what the right hon. Gentleman said, I am in entire agreement. I think it would be a mistake not to inquire into this subject. Here is a proposal which has been put forward, not by Bolshevists or Communists, but by sober, financial, economic people. A number of professors are strongly in favour of it, not because they are people of advanced views, but because they have definitely considered the matter and arrived at that opinion. Quite, a large body of expert opinion is in favour of it. It is simply absurd, if we are to inquire into the taxation of war profits, which we are all agreed we ought to do, that we should decline to extend that inquiry to the question of a Capital Levy. I cannot conceive any ground on which we should not inquire. It does not commit us to adopt the conclusions that may be arrived at, but it does enable us to arrive at the facts and to form a considered opinion. There is only one thing I wish to add to these observations before I pass to other parts of the Motion. I see great upheavals in various quarters of the Government to discover new sources of revenue. I do not think that is the proper way to approach this problem. The whole phrase is misleading. I doubt whether there are ally new sources of revenue. The whole revenue of the country must really come from the aggregate income of the country. There is no other source from which to get it, whether you take it by direct or indirect taxation, by a Capital Levy or by Excess Income Tax. It does not ultimately make so very much difference. It makes a great deal of difference to the individual, but not to the general financial situation of the country. You cannot get any more money out of the reservoir than actually exists, and it does not really make a very great deal of difference whether you draw that
money by one tap or by another. But the reason why I should deprecate a discussion on these lines is because I venture to think that the real way to approach this extremely difficult situation is not so much with any view to seeing how we can increase our income as to seeing how we can diminish our expenditure.
Perhaps the House will allow me to state very shortly what the position is. We have an enormous deficit£473,000,000. I have no doubt the Government have a plan for dealing with that deficit, and it may have been my density, but I did not follow from anything that my right hon. Friend the Chancellor of the Exchequer said in his speech what exactly that plan was, and I do not know whether any definite suggestion on the point was made. Apart from that, there is our future situation, and that is diagrammatically judged by what my right hon. Friend has called the normal year. He has asked us not to regard that as more than a kind of rule or canon by which we can judge what we are doing financially, and I see it is regarded as an exceedingly satisfactory state of things that really, if we maintain the whole of our war taxation and abolish all exceptional expenditure, then the two ends will just meet. I regard it as a most disastrous state of things. It means this, that there is not the slightest hope, unless I misunderstood it again, that there will be any remission of war taxation, as far as I can make out, within the life of the youngest Member of this House. It is not a very cheerful or enlivening prospect, and it does appear to me to make a very strong case for every possible economy we can carry out, and I do not gather that the Government differ from that view. My right hon. Friend has said that this is not an actual year, but a kind of diagrammatic year. I am not quite sure what he has allowed for in expenditure. He certainly told us quite frankly that he had not allowed for any exceptional expenditure, and he instanced old age pensions, about which I will say a word in a moment. I hope that possibly some member of the Government may be able to answer some of the questions I wish to put. Under the Treaty, we have undertaken very considerable increases in our territorial commitments. I do not know whether it is actually settled. but it is generally understood that we are to receive mandates for East Africa, a portion of Togoland, and a portion of the Cameroons. We are also to receive man-
dates, it may be—at any rate, some people think so—for Mesopotamia and for Palestine. I should like very much to to know what allowance has been made for the expenses to which those mandates will necessarily put us. I personally have the greatest doubt whether any one of them will pay their expenses for many years to come. I should think it exceedingly improbable. I may be wrong about it, but, at any rate, I should like to know Take, for instance, Palestine.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): It is paying its way.

Lord R. CECIL: Is it paying its way? I am very much amazed to hear it. If that is so, it may be that that is the answer to my whole question, that there is not anticipated to be any expenditure resulting from the territorial commitments. I am bound to say that if that is the anticipation of the Government it is a very rash one. I will venture to put one or two more questions. I am in a real difficulty about the Russian policy. I thought did understand what the Government's policy in Russia really was. I believed that the policy of the Government, in Russia was to discharge our obligations to General Denikin and Admiral Koltchak and also with reference to Archangel. We had to discharge them, and I personally always was of opinion that the Government were perfectly right in the attitude they took up to that extent, but I should be grateful to the Government if they can tell us exactly what it is all costing. The right hon. Gentleman the Secretary of State for War said we were giving our last £15,000,000 to General Denikin, but how much have we given first and last? May I very respectfully ask the Government also what exactly we are doing with General Yudenitch? I dare say the policy is all right, but I do desire to know what it is. Are we, in fact, assisting General Yudenitch, and, if so, to what extent, ant what money is it costing? Again, why did we withdraw our troops from Archangel and then send our Fleet to bombard Russian ports and sink Russian ships? It may be perfectly right, but I should like to know exactly what we are doing, and not so much what the policy is, because I understand we shall have another opportunity for discussing that, but what is the cost of all these operations?
Those are the external matters, which may or may not have a bearing on the
mormal year, but I very much want to know what allowance has been made for domestic expenses? I did not follow it from the figures so far put before us. Take, for instance, the Housing Act. There is no-one in this House who more earnestly supports housing. I believe it is absolutely vital, and I know that in my own Constituency, which is a rural constituency, the want of houses is terrific and is a very serious social evil. But I am bound to admit that I am a little flustered by the finance of the Government Housing Scheme. I have seen statements to the effect that it is going to cost £300,000,000 of the taxpayers' money. I earnestly hope that that is an entire misapprehension, because I cannot conceive a more disastrous thing, not only financially—it would be a very unfortunate thing financially—but from every point of view it would put an end to any hope of a really sound housing policy for the future. It would mean that we should have a vast mass of subsidised houses and that we should have a complete destruction of all the normal private enterprise in housing. and I do not see that there would be any resource open to the State except to continue always as the purveyor of houses for the working classes in all districts of the country, without regard to the price to be paid. I hope we may be informed what really is the financial aspect of the housing problem. It really is vital, both in the interests of the working classes and in the interests of the economical administration of this country. Then there is education. I do not know whether full allowance has been made for that, and for traffic. I remember during the last stages of the Transport Bill that the present Minister of Transport sketched a plan for the reconstruction of railways in order to enable a larger load to be carried on the wagons. Is that allowed for in the normal year? What I desire to know about this normal year is what is the basis on which it proceeds in regard to all these matters, because really the situation is a serious one. If by the continuance of war taxation to the full we can just make both ends meet, but in making that calculation we 'have not allowed for exceptional expenditure which in this or that Department of foreign affairs or in this or that Department of home affairs not only may but must take place, then I must say that the situation appears -to me to be excessively serious. My right
hon. Friend the Chancellor of the Exchequer has said quite frankly in regard to old age pensions—and when I say quite frankly, I would add that nothing could have been more frank and open than the whole of his speech—that no allowance had been made for an increase of old age pensions. I understand, and I quite recognise with him, that it is a very difficult question. The difficulty is, of course, caused by the increase in the cost of living. The old age pension which was worth 5s. a week before the War is, of course, not worth much more than 2s. 6d. a week now. [HON MEMBEES: "Less‡"] Well it may be less.

Mr. CHAMBERLAIN: It is 7s. 6d now.

Lord R. CECIL: Yes, but 7s. 6d. now is only worth 3s. 9d before the War, or less. But it is not only true of old age pensions; it is true of all fixed incomes, and, indeed, it is true of all pensions of all the old Civil servants and of numbers of other people, all of whom have appealed to every Member of this House for consideration of their claims. That is a matter which I venture to press very strongly upon the House. I believe there is no more important topic in the financial situation of the country than the high prices and the cost of living at the present time. It has not been dealt with as yet in the Debate, and I do press it upon the attention of the House very earnestly. If we can do nothing, be well assured that we shall receive overwhelming appeals, first to come to the assistance of this class, and then to come to the assistance of that class, because there is this general impression everywhere, that it is no use talking about a rise in wages or anything of that kind, for, as one of my constituents said to me, what is put into one pocket is taken out of the other, and it is vital to our whole situation. I do venture very respectfully to ask the Government what is their policy with reference to high prices? I noticed about two days ago that my right hon. Friend the Leader of the House said he had arrived at the conclusion that high prices were riot mainly due to profiteering or anything of that kind, but were mainly due to inflation.

Mr. BONAR LAW (Leader of the House): I said that high prices were due to a variety of causes, but that I had no doubt at the moment inflation, due to borrowed money, was one of the chief causes.

Lord R. CECIL: I am sure I do not wish to misquote anything my right hon. Friend has said. I do ask the Government what steps they are going to take, if any? I do not want to dogmatise about it. I know the enormous difficulty. I know there is a very large number of people who say that once you have got your currency increased it may well be better to keep it as it is than take the risk of attempting to bring it back to the pre-war position. But I do ask the Government what is their policy in the matter, because if it is true that inflation of currency is one of the chief causes of high prices, then the Government must have a policy to deal with it. Either they must say, "We will leave the inflation, and we will treat high prices as permanent, and do our best to bring up the general level of payments to that level"—a very colossal task—or they must have some policy of dealing with the diminution of currency. The same difficulty arose after the Napoleonic Wars. After three or four years, the Government, did decide, I believe, in that case on an attempt to re-establish the currency on a gold basis. I do not wish to dogmatise on the matter, but I do ask whether some member of the Government will be good enough in the course of the Debate to tell the House what is their policy in the matter, because I personally regard it as of the greatest possible importance in the whole financial situation. One thing is quite clear. Whether you deal with this question from the point of view of currency, or any other point of view, economy is essential.
I listened to hear what were the drastic proposals which the Government had to put before us. I am not sure I appreciated altogether what they were. One proposal my right hon. Friend put before us very strongly was the reorganisation of the Treasury. I dare say that is all right. Personally I have never been an admirer of the old Treasury system. I think it was a very bad system. I think it meant an enormous amount of work for the Treasury officials and an enormous amount of friction between the Treasury officials and the officials of the other Government Departments. It meant endless delays in getting anything done, and I believe it meant a very small saving, if any, in public expenditure. It meant that before any Department spent anything it was supposed to get Treasury sanction, and the Treasury had to inquire
elaborately into the nature of the expenditure and its desirability. The result was endless inquiry without any particularly good result, and it had this grave disadvantage—and I press this very strongly on the House—that everybody in every other Department was the enemy, of the Treasury. They had no inducement to economy. If they saved on one side of their expenditure, that did not enable them in the least to spend more on another side of their expenditure.

Mr. CHAMBERLAIN: My Noble Friend has never been a friend of reduction of expenditure in any Department in which he himself has been, and his contention now is that the Treasury shall only insist on a particular economy if it allows the same Department to spend the money in another way.

Lord R. CECIL: My right hon. Friend has really not apprehended the matter. I am very sorry ho thinks I am naturally extravagant because I am not. If I criticise his observations, I hope he will not think it is out of any want of respect for himself, because there is no member of the Government for whom I have a morn profound respect and regard than the Chancellor of the Exchequer. But the point I am urging is that the detailed check on expenditure by the Treasury is not the best way of exercising Treasury control. It is far better to say to the Government Departments, "Here is a sum of money we can afford, and we cannot afford any more; now make the best of it." Then every official in that Department will know it is to his interest to make that money go as far as he can. The whole energy of the Department will be concentrated, not on getting as much out of the Treasury as they can, for they will not be able to get any more, but on making the best of the money they have got in the public interest, and the result will be that you will get, for the first time as one of the great Departmental virtues, the virtue of economy. Every official will know that his promotion will depend upon how far he can make the money allotted to his Department go.
That is why I very strongly support the Amendment which has been put down by a certain number of my hon. Friends asking for a definite limit to be put to the whole of the expenditure, and then I think you ought to carry the principle further and have a limit to each Depart-
ment. My right hon. Friend will forgive me for criticising well-established prejudices. These views are not popular with the Treasury but I think, with all respect to the Treasury, they are wrong, and I do ask my right hon. Friend to consider very carefully whether he would not be likely to get a far more economic result with a system of this kind. After all, the real question is not this, that or the other method. It is a question of policy. If you want an economical system you must make your policy conform to that desire. Take the question of armaments. I very much hope the Government are not going to be satisfied with a reduction of this or that particular arm or unit. I hope that they are going to try and have an entirely new system—a new international system of armaments, which will enable us to have a real searching reduction in expenditure I should like to know what the policy of the Government on that matter is. I should like to know their policy both on the Army and the Navy. I do not ask for it to-day, but I do say that in that matter, and in all other matters, our only hope is an acceptance, not as a matter of peroration or speeches, but as a real guide to our policy, of the principles of the League of Nations. That is our only chance of having a real economical policy. We must recognise that, if we are to go on at all, we can no longer go on as potential enemies of all other nations. We must make for a genuine system of international co-operation. I am sure in that matter, at any rate, even if I seem to criticise the Government on other matters, I shall have the hearty assent of the Prime Minister.
I will only make this observation, and certainly it is not an observation intended in the most remote degree to apply to my right hon. Friend the Chancellor of the Exchequer. I do hope the Government will take the House fully into their confidence. I am sure that the country is crying out for that more than anything else. I do not know how it is, but there is an impression—I will tell the Government so, because I have found it to be so—that there is not complete confidence and can-dour shown by the Government, that. there is something not always quite absolutely candid and sincere, in their dealings with the country. I hope and believe it is untrue. But it is no kindness not to say that which I hear from so many sources, and I do hope and trust that they will be abso-
lutely candid, that they will put an end to the impression, which very likely quite wrongly prevails, that. they do not wove in these matters until some great agitation arises out of doors, but that they will recognise, if they are, as they well may be, called upon to be the leaders of the nation in a crisis not less difficult than we- have had to face during the War, that the confidence of the nation—not only their support, but their confidence—is absolutely necessary for the successful conduct of the business of the Government.

Mr. BOTTOMLEY: May I first of all associate myself with the Noble Lord in his appreciation of the spirit and the tone which marked the speech of the right hon. Gentleman who moved this Amendment? If I may say so without offence, that speech showed us that a Labour Leader may be a statesman, and it showed us also that, with a few more such Labour leaders on that bench, there would be less industrial unrest and very few strikes. I want to say, first of all, that in my opinion it came as a great relief to the mind of the whole country when we received the tonic which the Chancellor of the Exchequer administered to us yesterday. There can be no question whatever that in his gloomy review of the position in August last, he took an altogether too pessimistic estimate of the situation, just as some of his colleagues took a somewhat too optimistic estimate of what the Government, under the new regime, is accomplishing. I have in my hand a report of a speech, delivered about the same time as the speech of the Chancellor of the Exchequer in August, by the President of the Board of Trade. He told his audience that a Finance Committee of the Cabinet had been appointed, that the Prime Minister was its chairman, that he was throwing himself into the work with his characteristic energy, and, as a consequence, enormous economies were being achieved. That was in August last. Now we find that neither of these Ministers was correct, and we have now, I hope, put an end, for the. time at least, to that system of scare headlines and scare posters—things which I abominate—which have been telling all classes that Britain is rapidly going into bankruptcy, and have been depressing the spirits of the people. I do not object to optimistic posters, but only to scare ones.
I have, however, risen more for the purpose of endeavouring to make, if I may, a. practical contribution to the discussion.
I heard with amazement the Noble [...](Lord R. Cecil) state that no sources of revenue had been untapped. You are endeavouring to get revenue for the State, and in that case you can divert a lot from private income into the coffers of the State which at present, it may be, are going into wasteful, unproductive, and un-national avenues. Something has been said about Premium Bonds. I notice with satisfaction, I will not say any weakening, but no strengthening, on the part of the Chancellor of the Exchequer in his attitude towards that problem. But does this House realise that without the remotest difficulty you can get £1,000,000,000 of money in a. week by a Government issue of these Bonds, and that with that £1,000,000,000, which can be guaranteed to the Chancellor of the Exchequer by responsible city houses, if he wants it—you can buy up all the existing Treasury Bills which would mean that the Banks would be in a great dilemma to know what to do with their surplus money. Consequently, you would get cheap money automatically, cheaper production and greater exports, and you would go a long way towards remedying the adverse exchanges against this country. That is a practical method of dealing with that point; but I suppose we must wait and see how far we may follow the example of France and other civilised countries in regard to these new sources of revenue.
I am not going to delay the House for a moment about what I once thought was a source of income—that is money from Germany. That evidently has gone for ever. [HON. MEMBERS: "No, no."] Well, up to the present we have only collected £1,000,000 in local currency notes on account of the £48,000,000 incurred by the Army of Occupation, and on account of what is a first charge on the whole resources of Germany. I think we had better not be too sure that the Secretary of State was right with regard to his anticipations on the subject. I rather agree that the Secretary of State for War thought in chunks of millions in every other sentence in his speech when he looked forward to the time when he is going to show a substantial surplus on the Army expenditure for the year. Leaving that source of revenue out of account, I just want to say something to the Financial Secretary as to what is practicable.
Before doing so, let me in passing say that I realise that the system of doles
and subsidies has been carried to an absurd extent. As was pointed out by the Mover of the Amendment, the bread subsidy is as much for the benefit of the millionaire as the very poorest person in the realm. If we want poor people to get cheap bread under the circumstances we should circulate bread tickets amongst the people who want them and so enable them to get the bread, but do not let us give a general subsidy which is not necessary, and which only goes into pockets which do not require it. So with the other sub-sidies. I do not, however, want to enlarge upon this, because many people want to speak and I want to come to a practical suggestion. I want to ask the attention of the House and of the Financial Secretary to one item in the Paper which was laid the other day. If hon. Members will refer to it they will see that there is an item of five millions for increased interest on loans. I want to know why it was that at the end of September the Chancellor of the Exchequer altered the rate for Treasury Bills from 3½ per cent to 4 per cent., three and six months respectively, to 4½ per cent. and 5 per cent? We have a thousand millions of these Treasury Bills now floating. An addition of 1 per cent. to the rate of issue means an extra charge of £10,000,000 upon the State. So in this White Paper we have an item of £5,000,000 in respect of the remaining six months of the year on account of this item. That means, £10,000,000—for that additional 1 per cent. —simply, solely, absolutely, and wholly, for the benefit of the bankers. I want to know on whose advice—and the House is entitled to know it—the Chancellor of the Exchequer has pledged this country to an additional £10,000,000 per year for the benefit of the bankers who never pay their own customers more than 3½ per cent., while they can invest in Government Treasury Bills at 4½ per cent? It would seem that for some reason the Chancellor of the Exchequer said to the bankers at the end of September, "You do not seem to be making enough money out of the State; you had better have another 1 per cent. on the Treasury Bills. Or else his object was—perhaps it was a mixed sort of idea—he may have been put up to it by a permanent official to help to adjust the adverse exchanges—the old theory that you had to get dear money to improve the adverse exchanges ‡ But to do that you must have an effective gold standard. If that was his object, well, the exchanges
are worse to-day than before. In New York and Amsterdam, dollars and florins are costing more than before. The exchanges have gone worse. So it cannot have had any effect. Any City expert who understands that if lie wants to adjust adverse exchanges by dearer metal he will have to make the rate 10 per cent., not 5 per cent.
My own conviction is, and my past experience of Government Departments supports it, that the bankers have, as usual, hoodwinked the Chancellor of the Exchequer. To say to a banker, "We propose to divert all the money which now goes into gambling—betting if you like—cinemas, and theatres, and other ridiculous things, and invite the public to put them, say, into Premium Bonds, is to invite a reply from the banker, That is no good to me.'" But it must not be forgotten that the money which goes to various sources of amusement comes back in taxes. The bankers have evidently misled the Chancellor of the Exchequer as to the means of increasing the revenue. This may be a dry and a technical question, but it involves £10,000,000 of the taxpayers' money this year. There is another effect. The more you increase the rate at which you sell your Treasury Bills the more you automatically increase the rate of discount for traders' bills and to the commercial community. Instead, therefore, of increasing production and thereby helping the adverse exchanges of the country, you are doing the very opposite thing. I press that subject upon the Secretary to the Treasury, because want an explanation. I want to know whether in the next six months we are to find £5,000,000 for the bankers and whether in the next year we are to find £10,000,000, and why we are taxing the trading community for the benefit of the bankers? That was the main purpose I had in view in intervening in this Debate.
In regard to the rest of the discussion, I am not going to say much as to levies on capital or war profits. So far as the latter are concerned, we are supposed to have had 8 per cent. already. Whether we have got it or not, I do not venture to express an opinion; but the war profiteers have eluded the vigilance of the Income Tax authorities in this matter, and one may feel quite sure that the war profiteers will elude the vigilance of the right hon. Gentleman when he comes to levy his tax. Are you going to interfere in a man's
[...]ss and prevent him expanding it [...] he has, it may be, got the money caring the War for new machinery? The question is a difficult one. My suggestion, with all respect, in this matter would be to impress upon capital by such speeches as that of the Mover of this Amendment the moral duty of the capitalist towards the community. God knows he has proved his patriotism throughout the crisis. Let us do everything possible to encourage enterprise on the part of the capitalist and to produce good relations between capital and labour. Make them partners. That is the view of every large capitalist in the Kingdom. Encourage profit-sharing. Give the men a living wage and good conditions, sanitary and healthy homes and surroundings and the other social reforms about which we have been talking. You do not want fantastic schemes which you can never put into operation and which will only dislocate the whole of industry, however just they may be in the abstract and desirable.
In conclusion I simply say, with great respect, that I have no such faith in that great solution of all the difficulties with which we are confronted with which the Noble Lord's speech was concluded. It doubtless is my misfortune, but in my opinion the League of Nations is an empty phrase. I cannot see what it means. I think I know human nature as much as the Noble Lord. It is idle to say that you cannot or must not have enmity against nations. I think that was the phrase of the Noble Lord. I do not like it. I would prefer to say, rivalry and competition. The idea of the League of Nations is as old as the hills. The Noble Lord is a greater scholar than I am, but go back to ancient Greece; the experiment was tried there and with most disastrous results. It cannot be done. Let the nations come together by some mysterious process of evolution as the ages go on, if they are destined so to do, but let us to-day concentrate our attention on our own country and on our own Empire. Put the Empire's house in order whilst other nations are doing the same, and let us realise whilst these high and heroic principles are being preached at Washington and elsewhere that the nations behind them are at work night and day in their factories, and at their anvils, by their travellers and their commercial agents, doing their best to see to it that they get more of the trade of the world than we do. You cannot help human nature. I am Jingo enough—I
confess it—to feel that at present in the very large reconstruction my hope is to pull this old country of ours right round and to get back to the proud position in which we were, to try to make London once more the hub of the universe, to make the hall-mark of Britain the finest hall-mark in the world. Britain for the British‡ I want to help to make, as the Prime Minister said, the land a place fit for heroes to live in and also fit for heroes to have died for. Let us have true co-operation between capital and labour. This old Empire of ours is not done with it. The British Empire is still in a condition that, once roused to a sense of the obligations, duties, and dangers which confront us—as it proved in the War so it will prove in the days of peace—that there is no power on God's earth, League of Nations or no League of Nations, or any combination of Powers, capable of bringing that old Empire to the ground.

Mr. MARRIOTT: I do not propose to follow the last two speakers, brilliant as their contributions have been, into a minute discussion of the merits or demerits of the League of Nations. I would, with great respect, bring the House back to a discussion of the Amendment before us. That Amendment was moved in a speech of quite singular power, charm, and weight by the right hon. Gentleman the Member for one of the Divisions of Manchester (Mr. Clynes). That Amendment asks the House to agree
That measures should be adopted to meet the present financial burdens and assist in liquidating the National Debt, such measures to include the imposition of a levy on capital, and the reversion to the State of fortunes made as a result of the national emergency.
That is the actual Amendment which, as I understand, the House is now discussing. As far as I have followed the Debate it seems to me to have been initiated and carried on with a three-fold purpose. In the first place, to explore as thoroughly as we can the financial position in order to let the House of Commons and the country know precisely where we stand as regards expenditure and revenue respectively. The first necessity is to know precisely where we stand at present. For my part I think that the White Paper elaborated and amplified as it was by the singularly lucid speech of the Chancellor of the Exchequer, has sufficiently achieved that purpose. We know now how we stand to-day, or, at any rate, how we stand as regards current expenditure.
I am not at all certain that we know the worst in regard to capital indebtedness. There may be an answer to the questions which on that head I propose to put. Apart from that, we know pretty well where we stand as regards current expenditure.
The second purpose of the Debate has been to suggest methods for the curtailment and restriction of that current expenditure, and on that point the right hon. Gentleman who opened the discussion made, I think, a much more valuable contribution than was made yesterday from the Treasury Bench. If the first object of our debate has been reasonably attained I do not think I can say as much for the second as regards the contributions by the Government. We are faced with an enormous deficit—a deficit more than twice as big as the pre-war revenue, and what the country wants to know is how that expenditure is going to be curtailed. I was very glad to hear some remarks from the Mover of this Amendment about the bread subsidy, and to hear that on the whole he was not in favour of a continuance of that subsidy. I confess I did not quite follow him, and I should be glad to be more precisely informed as to what his alternative was. I understood him to suggest an extra shilling on wages which in some way or other the Government were to secure, but I did not follow him precisely. Nevertheless, it was a matter of great satisfaction to me that he should have lent the weight of his Very great authority to a condemnation of the continuance of the bread subsidy.
It will be remembered that the House appointed a Select Committee on National Expenditure, which has devoted an enormous amount of time to the question of this subsidy; and, if I may say so, I do not think the reports they have made on the subject have received from the House that attention which undoubtedly they deserve. I am all the more glad, therefore, to have the assurance of my right hon. Friend apposite that, at any rate, he recognises, and I presume that in this matter he was speaking for the Labour party as a whole, the very grave economic inconvenience involved in a continuance of the bread subsidy. He went on to speak of the expenditure of the Ministry of Labour, and in particular of the unemployment dole. On that question I am compelled to speak rather vaguely,
because the Committee to which I have alluded, and of which I am a member, is at present investigating the conduct of the Ministry of Labour, and I hope, as Chairman of the Sub-committee, specially charged with that investigation, to be able very shortly to present on that subject a Report to the House. Meanwhile I may say, speaking only for myself and not for the other members of my Committee, that I am not at all satisfied that considerable economies are not possible in that Department, so recently set up, but which has already become one of the great spending Departments of the State.
Again I would beseech the House to give all possible support to the Committee which is investigating this matter, and I would appeal to individual Members of this House to communicate their personal experiences of the extravagances of that particular Department, and I can only undertake to say that they shall be very carefully inquired into. Now I want to put one or two questions which I foreshadowed in regard to our capital indebtedness. There are three points in regard to this which are worrying me very much. The first is the appalling magnitude of our unfunded debt, and I wish the Chancellor of the Exchequer had been a good deal more explicit in his reference to that subject. The second point that worries me is the existence and magnitude of the External Debt. The Chancellor of the Exchequer made some reference to this subject yesterday, or at any rate to the £842,000.000 which we owe at present to the United States of America. In regard to that External Debt, I would just say that if it be true that the quality of mercy is twice blest, the quality of this portion of our debt is twice damned—it is damned in point of interest and in its effect on external commerce and trade. But the point I wish to get an answer to is in special regard to our contingent liabilities on this External Debt, and that is a point which, I think, has entirely escaped the notice of the House, or, at any rate, it has not been alluded to in the Debate.
There are two questions in regard to our contingent liabilities to which I want an answer. My first question is with regard to the £2842,000,000 which is put down as our External Debt to the United States: Does that sum include the money which on our security the United States has advanced to our
Allies? That is a very considerable sum, as the House knows. Alternatively, I want to know (if it is not included in that £842,000,000), whether the sum which America advanced to the Allies on our backing, and for which they took our security, is included in the sum which the Allies owe to us? I hope I am making my questions sufficiently clear to the Secretary to the Treasury, and I ask for an answer to those questions as explicit as we can get it. If both questions are answered in the negative, I must conclude that there is a further and undisclosed liability to which the Chancellor of the Exchequer has not alluded.
There is one other point to which I want to direct the attention of the House. I have said that there were really three questions which we were attempting to explore in the course of this Debate, but I think the Debate will be exceedingly unsatisfactory if it closes without accomplishing a fourth purpose, and to that I propose to devote one or two minutes. I want to know how we have got into our present financial situation. There is one sense in which the answer is very simple, and I know that I lay myself open to the derision both of the present Chancellor of the Exchequer and his immediate predecessor when I say that, however we got into this position, I believe there is only one way out of it, and that is by reestablishing the control of the House of Commons over the finances of the country. I hope that this Debate is a real beginning in that direction, and I think it is. But we want something much less spasmodic than a Debate evoked by the grave circumstances of the hour. We want some improvement in our permanent machinery. I think that is admitted on every hand. The House will recollect that during the last Parliament the Select Committee on National Expenditure made its ninth Report of the Session of 1918 in reference to our financial procedure.
Before making that Report the Committee addressed a questionnaire to all existing and recent Chancellors of the Exchequer, to Mr. Speaker, to the Chairman of Ways and Means; to the Deputy-Chairman, to the Financial Secretary to the Treasury, and all ex-Financial Secretaries, and to certain other Members of the House. That questionnaire was very widely circulated, and the answers to the questions there put were extraordinarily explicit and valuable. They all concen-
trated on one point. They all said that our existing financial procedure was inadequate to attain the end which we desired. I want to know what the Government have done. Although that Report has been in their hands for eighteen months, what have the Government done to meet the admitted views of all the authorities on this question? They have done virtually nothing. If Members of the House will turn to the Report to which I have alluded, a singularly eighty Report, and to the practical suggestions—there are sixteen of them—which that Report made, they will find that hardly one of them—there is one, but only one, 1 think—that has as yet been adopted.
I do not want to sit down without alluding more specifically to the words with which the right hon. Gentleman who moved this Amendment concluded his exceedingly impressive speech. He made some reference to the device of a Capital Levy, though he did not lay so much stress upon it as I had expected that he would. That is a very attractive proposition. Superficially, it is extraordinarily attractive. It is a short cut towards the restoration of financial equilibrium. But short cuts are proverbially dangerous, and they are particularly dangerous in questions of finance. They are reasonably safe if the ground is well known, but I suggest that in this matter the ground is very perfectly known. If I understood him aright, the right hon. Gentleman did not press for an immediate Capital Levy, although the Motion itself does so in very express terms. Have those with whom he acts altered their opinion since this Amendment was tabled? They ask that this measure shall be included in the devices which are to be immediately adopted. As I understood him, the right hon. Gentleman only asked for an inquiry. Which is the point that the party which lie represents are going to press? Are they going to press for an inquiry preceding such a levy, or do they ask for the imposition of that levy at once? I see many hon. and right hon. Gentlemen before me who will be in a position to give an answer to that question, and it is a question which it is very important to have answered, because upon the answer to it the attitude of a good many of us will depend. Speaking for myself, I am perfectly willing, as was the Noble Lord (Lord R. Cecil) below me, to consider the advisability of this measure, and I asso-
ciate myself with every word that he said in regard to it. I have never regarded it as necessarily a measure of confiscation. I do not think that we ought to use words of that character in connection with the suggestion at all. My only anxiety is this: Here is a suggestion made by responsible financiers—I admit it—and by responsible statesmen, such as the right hon. Gentleman who moved this Amendment, and it is a question which, without any sort of prejudice, we ought to examine and decide on its merits.
My own inclination is very strongly against the merits of the suggestion, but I hope that I am sufficiently open-minded to consider it on its merits. Personally, I am against it for one or two reasons with which a good many Members of the House are already familiar. It ought to be considered from two points of view. There is the equity of the proposal, but, much more, there is the question of fie fiscal feasibility of it. We are always told that we impose a levy already by the Death Duties. That would be a fair analogy if everybody were to die simultaneously. If everybody died simultaneously there would be no real distinction between a levy on the capital of the living and a levy on the capital of the dead, but I do not think that it is any part of the object of hon. and right hon. Gentlemen to cause the immediate and simultaneous decease of all the wealthy people in this country. In the second place, a levy has this very grave objection. From the point of view of revenue producing, you cannot have it both ways. If you impose a levy on the capital of the living you will not get a revenue from that same capital at their death. I know that the methods Super-tax Commissioners u5e are exceedingly ingenious and that they do manage to get two revenues in the same year from the same capital—at least, I have known such cases—but I think even the ingenuity of the Super-tax Commissioners would be a little over-strained if they were asked to make a levy upon the same capital—during the lifetime of the possessor and again when he died. If you take it while he is alive, you will not get it when he dies. Again, the more you impose a levy on capital the less you can hope to derive from a tax on income. You cannot have it both ways. You have to make up your minds between them. However, the House, I am sure, is only too painfully familiar wish
the arguments that on similar occasions I have had to address to it on this subject, and therefore I will only express my own view that it would not be desirable to accept the Amendment, even though it has been put before us in terms of such moderation and with such ability by the right hon. Gentleman the Member for one of the Divisions of Manchester.

The PRIME MINISTER (Mr. Lloyd George): I feel that I have every reason to be pleased that some days before the House met for these Autumn sittings I invited a discussion upon the financial situation. Not merely the Government, but the House of Commons and the country have good reason to be pleased with the Debate. It has cleared up a good many misapprehensions, it has removed a good many doubts and anxieties, and it has enabled us to give a complete answer to many misleading statements which have been put in circulation to the detriment of the public credit. I did so for two reasons. The first it that the House of Commons has the supreme charge of the finances of the nation. I agree with what has fallen from my hon. Friend (Mr. Marriott) in that respect. This is the place to examine our financial difficulties, to search them out, to find out what is their extent, and to propound remedies for meeting them. That is one reason. The other is that here you can answer misstatements. If figures are used that are inaccurate, they can be corrected. If statements are made which have no reference to the actual condition of things, you can instantly reassure the House of Commons and the public with regard to them. It is quite beyond the individual power of any Minister or of all Ministers to correct every mistake which appears in the newspapers, and, as I have reason to know, when you do attempt to correct a mistake, it sometimes is not published. I had another reason why I ventured to invite a discussion in this House. I knew that we had an. excellent ease, and therefore I was exceedingly anxious that there should be a discussion in order to make it clear to everybody. I think that the discussion has been fully justified, and I am sure that I shall carry almost the whole House with me when I say that never has there been a widely advertised case which has so completely collapsed when it has come to be examined. The moment my right hon. Friend (Mr. Chamberlain) sat
down after his exceedingly powerful statement—one of the most powerful and convincing statements which it has been my privilege ever to have heard in this House—I felt that the Debate was practically over so far as the charge of extravagance, of avoidable extravagance, was concerned.
6.0 P.M.
The House has devoted itself in a way which is worthy of its greatest traditions to making suggestions, to examining propositions, and to helping the Government to meet these great financial difficulties. It has demonstrated that the kind of epileptic screaming which has deafened our ears does not really find an echo in a calm assembly like the House of Commons. So completely was that case disposed of that most of the Debate, after my right hon. Friend had sat down, was devoted to a discussion between the friends of retrenchment, who are not in the least agreed either as to the objects of economy or the subjects of taxation. That is an illustration of one of the greatest difficulties that the Government have experienced in effecting retrenchment. It is very easy to lay down the general principle that you must retrench. You can say that the costs of the State are very high and that you must cut down, but the moment you come to an examination of the subjects in respect of which you ought to retrench you will never get agreement among the friends of retrenchment. I do not know that I can put that better than by supposing a Cabinet of economy. Let us assume that the "Wastrels" have been turned out and that there is another Coalition all for retrenchment. They would agree, first of all, that you must cut down, you must retrench, and they would start to examine the various items of expenditure in respect of which you are to retrench. I have put down the suggestions which have been made by some of those who, I have no doubt, would take a leading part in this new Administration. First of all, the unemployment donation will have to disappear altogether. But my right hon. Friend (Mr. Henderson), who spoke last night, also of the party of economy, resisted that most violently, and he does not carry complete agreement even in his own party, for another right hon. Friend of mine, in the very able and very statesmanlike speech which he delivered to-day (Mr. Clynes), said he was opposed to this
dole, but that his remedy was an increase of 1s. in the wages of multitudes of workers throughout the country.

Mr. HODGE: No; that was the bread subsidy.

The PRIME MINISTER: I beg pardon; that was the bread subsidy. His remedy was to find employment by setting up national factories and national workshops in industries and running them, although it might be at a loss. There is not very much economy in that. Somebody would get up and say, "I propose the unemployment donation shall disappear." Other members of the new Cabinet would say, "By all means; let us set up national factories." As to the bread subsidy, the only Member who suggested it should go is my right hon. Friend, and his suggestion was, as an alternative, a shilling increase in wages. I am not sure that that would command complete unanimity. Then you come to housing. Somebody would say, as has been said, "You must drop these great houses, they are too extravagant." That is one proposal. Some of the right hon. Gentlemen who have been making speeches for economy would say, "You must have houses and you must build them." Then others would say, "Let us build them of mud or timber or tin or something which is not too expensive." The Noble Lord said you must not build them in such a way that they are a cost to the State.

Lord R. CECIL: As my right hon. Friend asks me, I do not think I went so far as that, because it would be impossible to discuss the details of housing policy in a Finance Debate. I did say the housing scheme was too extravagant and was going to throw an undue burden on the public.

The PRIME MINISTER: I do not recognise that. That is not the scheme. The Noble Lord probably got that from some newspaper.

Lord R. CECIL: I asked for a contradiction.

The PRIME MINISTER: I am going to give it later on. So far there is no great agreement about reduction. Then we come to education. Some of the friends of economy suggested last night—I understood them to say—"We cannot get rid of the Ministry of Education, but let us suspend the expenditure on education." What becomes of the new retrenchment and anti-waste administration? There is no agreement upon any
suggestion which has been made in the course of this Debate for retrenchment. There is no agreement amongst those who are in favour of economy and who think we are spending too much. Then we come to the way we should meet expenditure. Hon. Members say, "Let us have a Capital Levy." That is not accepted by all those who support them on the general principles of retrenchment. My right hon. Friend who sits opposite me (Sir D. Maclean) would come to the rescue of the new Cabinet, I have no doubt, and he would say, "A truce to all these details. Let us stick to principles and let us reassert the old principles of peace, retrenchment, and reform." That would be the only way in which you could get agreement between all the sections of the new economy party, and that would not last very long. I am only pointing out that it is very easy to say you most retrench and you must economise. But the difficulty always comes when you begin to choose the particular subjects on which you should economise and the particular methods by which you can raise the cash.
Some right hon. and hon. Gentlemen in the course of the discussion said that the Government had done nothing, and asked "Where are their drastic remedies. They propose nothing." I think those speeches were prepared before yesterday and they forgot to strike those phrases out of their notes. A prepared speech is a very risky thing. There are special risks in it. Entering into a debate with a prepared speech is like entering into action in a tank. It is all right unless an unlucky shot cripples the machinery. There you are, the guns are all placed most carefully, and you feel that you are going to ride forward and scatter havoc and devastation, but a shot comes and cripples your machinery, and you are done, and you can neither get forward nor go back. I have been looking at the Debate of yesterday and I can see that the battlefield is strewn with crippled tanks. It is far better on those occasions to trust to your own right arm, and some of my hon. Friends did not do so. All these sentences, "What is the Government doing?" "Where are their remedies?" "How are they going to meet all this expenditure?" ought, I think, to have been left out when they came to reply to my right hon. Friend. Let me remind the House that first of all there is the coal subsidy gone, and that is a substantial sum. With regard to rail-
ways the moment we were equipped with power we took steps to get rid of the railway subsidy. You may say, "Why has it not been done?" But the House of Commons is responsible, and those who are criticising the Government for extravagant expenditure are those who took a leading part in the delay. I do not criticise them. They may have been right. But they proposed that a Committee should be set up to examine all the proposals. That would take time. The proposals are ready and the Committee is there, and the moment it has examined the proposals the railway subsidy goes. That is the second step taken by the Government to get rid of expenditure.
The greatest expenditure is in the Army and Navy. What has been done there? The Navy is almost at pre-war strength at the present moment, and by the end of the financial year it will be less. What about the Army? The Russian expedition has been wound up. Is that nothing? At one time is was everything. In every Debate we heard of the extravagance of the Government spending all those millions in Russia. We have wound up the expedition, and they say that is nothing. Take another case. One of the bitterest opponents of the Government said that the real test of economy lay in what we are doing to reduce personnel. I agree it is a good test, and, in fact, it is the only test. So long as you aw keeping up the numbers of the Army and the Navy there is no use talking about economy. What has been done? At the date of the truce, the Army, Navy and Air Forces totalled 4,400,000 men. In November, that is twelve months afterwards, they will be 720,000. Is that not a drastic reduction? What more? By the 31st March they will be under 500,000. They are now in the course of being demobilised. That is not something on paper, but it is going on steadily day after day as quickly as the machinery will put it through. My right hon. Friend referred to a certain case of a man in the Army. I have no doubt there are men of that kind. They take their turns. I do not know when he entered the Army, but there were others who were there before him, and they have got to he demobilised first. There must be individual cases of that kind, but by the 31st March next they will be under 500,000, and they were 4,400,000. It is better than the February forecast. The February forecast was, 825,000 men on the 31st March next in the
Army. By the 31st March next there will be 300,000 men. Is that nothing? And we are asked, "Where are those drastic remedies?" "What are the Government doing?" when we are reducing the men in the Army from 3,700,000 at the date of the Armistice to 300,000. That is not regarded as a drastic procedure to reduce expenditure. Next year there will be a substantial surplus out of realisable assets, which I hope will go to the reduction of debt.
What about my right hon. Friend's provision for the liquidation of this great debt of £8,000,000,000? The provisions are fixed up for liquidating this great debt in fifty years. Is that not one of the most magnificent proposals for liquidating national liabilities that has ever been put forward? It is one of those things that will resound throughout the world as a testimony to British courage, and to British foresight—that you should make a provision for wiping out a gigantic debt of that kind in fifty years. Hon. Members must keep in mind certain elementary facts. I really apologise to the House for mentioning them, and I should not do so except that they seem to be overlooked. The first elementary fact of which I have to remind everyone is this. There has been a war—a great war—the costliest war the world has ever seen. That is the first fact that everyone has to get into his mind. From that fact inevitably other facts result. What are they? An enormous debt. A debt of £8,000,000,000 has been flung at us as if we were responsible for it. The £8,000,000,000 is money which we raised to save our lives, money every penny of which was well spent and requited in the triumph which this country has won. But having raised that gigantic sum of money you must pay interest on it and you must make provision for a Sinking Fund. My right hon. Friend (Mr. Adamson) examined how you could meet it. He said the first suggestion was repudiation, and very properly he would certainly have nothing whatever to do with that. If you do not repudiate, there is only one alternative and that is that you must pay. What is the use of charging the Government that pays an obligation of honour with extravagance? It is the biggest item, it is the heaviest item, and it has to be met. What is the second inevitable consequence? Pensions of £120,000,000. In so far as the Government are concerned, they have only responded to pressure from every section of the House of Com-
mons. When you have £120,000,000 added to another £400,000,000, not a penny of which will be challenged by anyone, it is no use saying that it is the extravagance of the Government that is responsible for it. Take the increased pay in the Army and in the Navy for our soldiers and sailors, and increased pay for the Civil Service, men who are rendering honest good service, as good as is rendered by any civil service in the world—and the teachers in the schools. What is that due to? It is due to the cost of living having increased. That again is one of the inevitable consequences of a great war of this kind, and we have to meet it. That is not extravagance.
"But," it is said, "there are certain special and exceptional charges which fall upon this year which you somehow or other ought to have got rid of." Let us face that. The first year after the cessation of hostilities of a great war is always an expensive year. The United States of America, which had not got our Army nor our Navy, which, I think, demobilised much more quickly than we did with our much greater force in France and in other theatres of War, have borrowed this year £1,200,000,000. The first year after the cessation of hostilities is always an abnormally expensive year. That is historically true, and it is necessarily true. You cannot disarm without making peace. Demobilisation, when you make peace, takes time. You cannot tell men, "Peace has been made; now drop your arms; we have nothing more to do with you; find your own way home the best way you can." That is not the way to treat men who have faced death and done their best for their country. We have special difficulties. Our Army was more scattered than that of any other Allied Power. We fought in every quarter of the globe. Most of the work in Africa was done by us. Practically the whole of the conquest of Turkey was the achievement of British arms. There were 1.500,000 men put into the fight with Turkey. It was the achievement of Great Britain, and we have got to hold it now. That is our doing. We have accomplished one of the finest tasks for civilisation this country has ever set its hand to—the emancipation of a vast country, one of the richest in the world, from the blighting influence of the Turk. After civilisation has failed for hundreds of years to accomplish it, Britain has done it. Were we, having done it, to go home and leave it derelict? That is not the policy of British statesmen.
But that costs money. The hon. Gentleman (Mr. A. Williams), who, I believe, is amongst the economists, prefaced the Debate yesterday by wanting to know why we left Armenia. We left Armenia because we wanted to economise. We cannot really police the world, and we honestly thought there were other Powers which might take their share.
"But why do you keep your men so long?" My right hon. Friend (Mr. Clynes) said we knew Germany would sign. I was at the Peace Conference. We never knew till the last moment whether Germany would sign. I will tell you more. Germany did not know whether she would sign.

Mr. CLYNES: The point was that Germany was incapable of offering military resistance.

The PRIME MINISTER: There might have been military resistance if there had. been no military machine.

Mr. CLYNES: It is not suggested that we should have no machine.

The PRIME MINISTER: What is the good of having a machine unless it is an adequate one? I was at that Conference. Every morning we had conflicting reports. The view of the majority was that Germany would not sign. That was the view to the last moment, and the Ministry in charge definitely resigned rather than sign it. The Assembly at Weimar gave indications that it would not sign and they had to cancel a resolution in order to sign. We had to send for Marshal Foch, and take counsel with him as to what he should do to compel them to sign, and to make arrangements to march to Berlin. Marshal Foch came to the conclusion that the Army on the Rhine was insufficient, and it was due to the fact that we had three or four divisions in reserve which we had not demobilised and which we could place at the disposal of Marshal Foch—that he felt he could compel a signature. But if he knew that, does my right hon. Friend imagine that the Germans did not know it as well? Supposing we had found we had not an Army, would not the Germans know it? It was a very drastic Treaty. Those who are criticising us on this account are the very people who are criticising the Treaty because it is too drastic. Would the Germans have signed if they had known we were not in a postion to compel them to do so? Sup-
posing we were not in that position. We could, it is perfectly true, have called men back to the Colours—men who had gone back to work—we could have dislocated factories, disturbed trade, begun afresh to build up a new Army. Of course, we could have done it, but what a spectacle that would have been for the whole world‡ And what a waste. Does my right hon. Friend imagine that that would have accomplished economy? Quite the reverse. If we had not got the force you would have substituted a defeat for a deficit, and thrown away the sacrifices of this country and of hundreds of thousands of brave men merely to make your accounts balance for the year 1919. A Government which did that would have deserved impeachment, and I have no doubt would have had it. That is the answer to those who say, "Why did you not begin doing these things until August?" We did it in August because that was the first time we were assured by those in command of the Army that it was safe for us to begin, and we were bound to take their advice in that respect.
My right hon. Friends have only to see what happened after the Napoleonic Wars to see that the first year after peace is not a normal year. 1814 was a year when the allies were in occupation of Paris. The French military power was broken, to all appearance, the head of the military conspiracy was in exile, and the financial year 1814 was a year of peace. Expenditure went down by 2½ per cent. in this country. That was met mostly by borrowing. Sixty-five per cent. of expenditure in 1814 was borrowed and 35 per cent. was derived from taxation. In 1815 for nine months there was peace, and there were only three months of war. Expenditure went up. 1816 was not a normal year, and they had to borrow then. It is perfectly true that in 1918 we borrowed 65½ per cent. and taxation was 34½ per cent.—a very fine achievement. In 1919 we borrowed 29 per cent. and raised 71 per cent, by taxation. Next year there is no borrowing and there will he a balance on the right side. I am told a normal year will be a year of a deficiency of £2,000,000. Let us take that. It is a deficiency on the assumption that Germany pays nothing. Why should we assume that? Germany this year is broken. Her people are enfeebled and her production has fallen 40 per cent., and that is probably why my right hon. Friend was unable to give a better account of the
contribution made by Germany for the Army of Occupation. But that is a temporary symptom which will pass away, and Germany will make her contribution. There are some who seem to think that there will be a considerable contribution and others who think that it will be less, but is there any man here who thinks that Germany is not capable of making a contribution that any rate will wipe out that deficiency in a normal year? That is the position. I do not think from the point of view of economy, and from the point of view of the way that we are dealing with our financial difficulties, Britain need fear comparison with any country in the world. My right hon. Friend (Lord Robert Cecil) talks about paper money. I agree with a good deal of what he said, but I do not think it is the paper money that makes the difference. It is the fact that you borrowed so largely, and not the paper money. I do not agree with him there, but it is a very abstruse topic, which I have no doubt will provoke a good deal of unnecessary controversy, and I have quite enough on my hands to deal with. It is not the £400,000,000 odd paper money that makes all the difference in prices, but the fact that you borrowed these thousands of millions.

Lord H. CECIL: I do not think that is agreed.

The PRIME MINISTER: On the contrary, I suggested that it is very controversial. I am certain the Noble Lord would not agree with it, because it is so obvious. The paper money of France is three times ours. Germany's paper money is over three times. In Germany it is between four and five times. I have no doubt the question of paper money is a tremendous fact, but that is not the whole thing. [HON. MEMBERS: "Russia‡"] Oh, yes; if you turn out paper money by the thousand millions, certainly it will affect the nominal prices, but I do not think that the I: 400,000,000 of our paper money is responsible for the high prices to the extent that my Noble Friend thinks. Compared with other belligerent countries in that respect the position here is infinitely better, and our difficulty in coping with the question is considerably less. I am not in the least saying that it is not very desirable that you should deflate your currency. I am not combating that.
There is another advantage. The greatest military power in the world is
without an army. The navy that menaced us is at the bottom of the sea. I am only putting that in order to show that we have grounds for confidence in the financial stability of the future. The great disturbing element in Europe has been demolished and swept away. Conscription has gone in the country that really drove other countries into Conscription. The initiative in that movement was taken by Great Britain. Here let me say to those who criticise us as men who are doing nothing, that we have arranged that by the end of this financial year there will not be a conscript in this country. Is that doing nothing? There is no country in Europe whose condition justifies optimism more than ours. Optimism has been denounced in unmeasured terms. Why? Is it an offence? Is it a mistake? Is it a crime to take a hopeful view of the prospects of your own country? Why should it be? There were men during the War who thought that you could not be patriotic unless you took a pessimistic view. Why should patriotism and pessimism be identical? Hope is the mainspring of patriotism. If you believe in your country, you trust in your country, you hope for your country. Why should we be denounced for optimism as if we were guilty of an extravagance—and a financial extravagance It would be a crime to mislead, to hide facts, to conceal, to distort, in order to create a false hope, but it is equally a crime to distort, to conceal, to suppress, to colour, in order to destroy the credit of your native land. This nation's industry, this nation's trade, this nation's commerce, depend upon its good credit. We have to borrow, but that is not the last word. We have to create confidence that Britain can weather this storm as she has weathered every other. So she can. But do not let us say that she is rocking, do not let us say that she is sinking.
That is why I am glad that the speech of my right hon. Friend the Chancellor of the Exchequer has created an impression which has given new hope and new confidence. If his speech is not based on facts, let anyone point out where. I have been listening to speeches to find out in what respect my right hon. Friend withheld a single fact upon which he based his conclusions. It is no use saying that if the House of Commons believes that speech it is to be threatened with direct action. It is said that there is such a discrepancy between my right hon.
Friend's August speech and his October speech. Of course there is, because the facts have improved. There has been an appreciable improvement in the situation. The numbers of the Army have been reduced by hundreds of thousands. There has been a reduction in the expenditure on the Navy, because the demands upon it have gone. We have made arrangements about the coal subsidy: The railway subsidy is a considerable one, and we hope to make arrangements about that. These facts are of enormous importance, and if my right hon. Friend said in August that the expenditure then would be too crushing for this country to continue to bear, why should he not say that there has been an enormous improvement since August, and that in October the facts, in his judgment, restore the situation? I am not counselling complacency; on the contrary. For economy, as well as for liberty, the price is eternal vigilance. We must be watchful, and I am inviting the House to be watchful; but I would warn the House not to mistake economy for a refusal to spend money upon objects which are essential to the national life. There is a danger in panic that it always goes too far. Do not create an unreasoning feeling of fear. Fear has no reason, fear has no discrimination, fear is blind, and it strikes here and strikes there without any concern as to what it is hitting down. That is why I am glad of the effect of the Chancellor of the Exchequer's speech—because it restores the nation to a sane, healthy view and perspective of the whole situation, and we can examine each demand on its merits.
I was sorry to hear suggestions that you are to cut down education. I was specially distressed to hear that speech coming from a Scotsman. It was a very entertaining speech and a very witty speech, and I do not mind saying that I enjoyed it very much, although I did not agree with it. He said he did not believe in the schoolmaster, and he gave an illustration. Speaking as a counsel, he said that no barrister likes to have a schoolmaster on a jury. Well, of course, he does not. He is not so easily, I do not like to use the word bamboozled, but he is not so easy to persuade always. I have great respect for the great race to which the hon. Member (Mr. Macquisten) belongs. There is no man here with more honest admiration for their native genius
and qualities, but I say that in spite of all these qualities they would never have achieved the pre-eminence which they have won in the trade, the industry, the commerce and the life of the nation had it not been for the consistent way in which they have educated their people. And they know the cash value of education. There has been nothing so productive to the Scots as their educational superiority. Look at politics. The Leader of the House is a Scotsman. The two Leaders of the Opposition are Scotsmen. Three Prime Ministers were Scotsmen, and another Prime Minister pretended that lie was a Scotsman in order to have a look in at all. Our two archbishops are Scotsmen. The ordinary affairs of this mortal world are run by Scotsmen, and when you get to the upper world there are Scotsmen looking after affairs there. My hon. and learned Friend suggested last night that had it not been for the evil influence of the schoolmaster they might have been looking after the other world as well. I hope that you will not become unreasonable through sheer fear and cut down education. There is nothing that this War has demonstrated more clearly than the value of education, especially on the technical side, in peace and war. What has been said about education is not very helpful. There is no doubt that very often the resources placed at the disposal of the authorities might, as has been said, have been used in other ways. That is another matter. But do not let us begin cutting down something which has been demonstrated by the highly efficient nation to which the hon. Gentleman belongs to be one of the most important elements in the productive qualities of our people.
The same thing applies to health. It is important that we should remember the value of human efficiency—the health of the people, the education of the people, the goodwill of the people. A great deal has been said here about economy—and rightly. I was very glad to hear my right hon. Friend dwell on the importance of production. Production is the truest of all economies. 'What do we see now? The depreciation in the value of the sovereign at home as well as abroad is the heaviest tax at the moment upon the nation. The heaviest tax is not accounted for by the Chancellor of the Exchequer in his Budget. There is only one way of appreciating the sovereign. That is by
increasing the production of the nation. My right hon. Friend was absolutely right there. Let us have economy. Let us also have production. We can only do that by securing a healthy, well-trained, contented people. Do not make the mistake in the hour of terror at the magnitude of our responsibility, of saying, "Let us spend no more. Let us leave the health of the people where it was. Let us leave their comfort where it was. Let us leave their training where it was." There never was a greater folly than that, even in the name of economy. I appeal to this House to show the courage of the great people we have the honour to represent here, to face our responsibilities all round. to pay our liabilities, and discharge our debts, but, above all, to discharge our debt to the people who were prepared to sacrifice their lives on the battlefields of the world for the country we all love.

Mr. HOLMES: rose—

HON. MEMBERS: Divide ‡

Mr. SPEAKER: I would ask hon. Members to allow the hon. Member to proceed.

Mr. HOLMES: I am going to take the advice of the Prime Minister. I have a prepared speech here, but I have put it in my pocket, and will trust to my own knowledge of the subject in what I have to say. I just wish to refer to the last few words of what the Prime Minister has said. He has called attention to the fact, which has been repeated so often, that the one great need for this country is increased production. We are all saying it. We have been saying it for a long time, but we have not been able to get the industrial machine going at full speed. The great reason for that is the effort which is being made in many quarters to reduce wages when the cost of living falls. The Government are partly responsible for that owing to the action they have taken in connection with the railway strike. If the workers of the country increase production, that will inevitably bring down prices. Therefore, if you are going to reduce wages, in accordance with the fall in the cost of living, the workers of the country will see that for their increased production they are going to be rewarded by a reduction of wages. We shall never get full production from the workers of the country if increased production simply means that what they gain in the reduced cost of living they are going to lose in re-
duction of wages. I would suggest to the Prime Minister that he would say that so far as Government Departments are concerned there shall be no reduction of wages, and if they would persuade the employers of the country to say also that there shall be no reduction of wages then every worker in the country would have an incentive to increased work, because he would know that increased cost would reduce the cost of living, and that would mean for him increased wages. If increased production reduces the cost of living it will give an incentive not merely to the employer, but to the worker. [HON. MEMBERS: "Divide ‡"] I have only got one sentence to say. [An HON. MEMBER: "Say it ‡"] If we can get all employers to put forth their best science, their best effort, and adopt new methods in their factories, if we can get every worker working with a will, we shall be able to pay wages in this country above any that were ever thought of in the past.

Mr. HOGGE: rose—

HON. MEMBERS: Divide ‡

Mr. HOGGE: After the Prime Minister has given the House of Commons two days to consider the grave financial situation, 1 do riot think that this Debate should be brought to a close before many Members of this House, who may have criticisms to offer and suggestions to make, have an opportunity of speaking. There may be some other Amendment on the Paper, but the Prime Minister has not said a single word about the expedient of dealing with revenue from the point of view of a Capital Levy, and yet he is inviting this House, if we agree to the suggestion made from behind by other Members, who may wish to get on to another Amendment, to go to a Division on this Amendment without the House being in possession of the opinion of the Prime Minister on the most important financial expedient which has yet been proposed for dealing with the question of debt. There are some of us who have criticism to make, even of the speech of the right hon. Gentleman. No one is better able than the Prime Minister to deal with the House of Commons in a way which evades the real arguments he has got to meet. A great deal of the speech to which we have listened may not have been an epileptic scream, as he described the criticism of the Government by persons outside, but there has been more repartee than reason in the way the Prime Minister
has met the situation we have got to meet. We are told that we ought not to give way to hysteria in thinking of the financial situation. My right hon. Friend says that it does not matter very much that the Chancellor of the Exchequer made a foolish speech in August, because since then the situation has changed. After all, a suggestion of hysteria would apply to the Chancellor of the Exchequer quite as much as to those of us who have ventured on criticism from time to time. The House ought to remember the exact words of the Chancellor of the Exchequer. When dealing with this very point on the 7th August, the Chancellor of the Exchequer said:
If we are to continue to spend at the rate we are spending now, it would lead us straight to national bankruptcy.
7.0 P.M.
My right hon. Friend has mentioned one or two items only on which he says the Government have economised. He says that they have got rid of the coal subsidy, and that they are getting rid of the railway subsidy. He does not give the amounts in either case or the dates. It is quite fair to say that these sums are at the moment being spent, spent at the time in which we have presented to us the White Paper which I propose to accept, though it is not accurate, and which still requires a very large amount of explanation. What was it that the Chancellor of the Exchequer said had improved from 7th August, when he made his previous statement? He said there had been an improvement in the revenue on tea, tobacco, beer and stamps. Does the House of Commons realise that the period between '7th August and this White Paper is eighty-one days? The Prime Minister is an old Chancellor of the Exchequer, and I rut this question to him, "Would he, in charge of the national finances, have presented to the House of Commons a White Paper, pinning himself down to a statement of what might become a permanent increase on the basis of only eighty-one days' improvement in the revenue?" No Chancellor of the Exchequer, as the right hon. Gentleman knows, would ever venture to come to this House and pretend that the Estimates drawn up in a normal year would be likely to be backed in actual fact on the basis of eighty-one days' experience of an improvement on tea, tobacco, beer and stamps. I would suggest to my right bon. Friend, and to the House, that one reason why there has been this improvement in these four items—and they are the only
four items which have been advanced from that bench which prove that revenue is improving—is because the Government have been distributing a large amount of Government money. My right hon. Friend knows it; he used the argument in his own speech a few minutes ago, with reference to the question of the Government never doing anything. He said, "Take the question of demobilisation. Look what we have done in that." Of course everybody is glad to see the rate at which it has been speeded up, but the right hon. Gentleman knows that demobilisation has meant the payment of large sums in gratuities and other payments to officers and men within the last few months; more payments within the last few months than at any other period. These gratuities in money ix ere paid out of Government money; but it was borrowed money. It has not been saved. These men, as my right hon. Friend knows —and perhaps nobody is more entitled to it than they are—these men have had their fling. They have been enjoying them-selves after four or five years of service. They have not taken the advice of the Chancellor of the Exchequer. They have not saved, and it is because of their spending that the Chancellor of the Exchequer now comes here and pretends to us that the country is prosperous. I am perfectly certain, however much all of us would wish the results to be more permanent, that the Chancellor of the Exchequer is making a very serious mistake if he binds himself to carry out the promise of a normal year on so slender a basis as he has suggested.
Let me turn to the other side of the account, to the expenditure side. Is my right hon. Friend willing to assure the House, and will he back it with his own solemn opinion, that we have got to the end of our foreign policy expenditure arising out of the War. We have got out, or at least nearly out, of the Russian entanglement; I believe there are a number of men yet in Russia. We have got out of that, nobody knows at what cost, but presumably at not less than £100,000,000. But, after all, there are other expeditions which must be taken into account and to which the Prime Minister has not alluded at all. Take three of them; I will not argue them in detail because it is only fair to mention them. Take Palestine, Mesopotamia and
Persia. Take the latter, as illustrating what I mean. We have made an agreement of some kind with Persia; we have taken it under our wing. I believe it has caused some irritation, but in any case Persia has got to be developed in order to meet the expanding productivity of this country and as one of the likely markets for the produce of this country. There are going to be contingencies which will be extremely expensive if they develop in a way which would suggest itself to my right hon. Friend without going more fully into detail. No allowance has been made for contingencies. I need not take the second point, because it has been referred to already in the Debate, and I do not want to cover the ground over again.
Then there is the policy of reconstruction, the policy of the new world and the new era. My right hon. Friend was very happy in his allusion to the part that Scotsmen have taken in controlling this people here on earth and up in heaven, but after all no Scotsman has ever ventured to create a new world and a new earth. That has been left to gentlemen of another nationality than Scotsmen. We Scotsmen may be enterprising, but we have never entered into competition with the Creator. We have refrained from entering into competition with the Creator of the Universe, and we are not suggesting either a new heaven or a new earth. Nor have we published, in an illustrated paper, with the photograph of the Creator on the front page, how it is to be done by himself and his colleagues who sit beside him now on the Front Bench. I do not know if he is going to take a week or a fortnight to do it, and which day is going to be the first or the last. But in any case he has promised us a new heaven and a new earth. My right hon. Friend, in the latter portion of his speech pointed out that you cannot reduce expenditure on some of the things that will make the new world. He mentioned one or two, like education or housing. Does he believe—I do not for a single moment believe that he does—that in the normal year that lie has presented to the House he has got the money to enable him to make a beginning with that? Not a single bit of it. He knows, if he turns up the White Paper that the expenditure on housing is a paltry £10,000,000 for 500,000 houses in the new world.

The PRIME MINISTER: No, no.

Mr. HOGGE: Yes, it is here, on page 4 of the White Paper which you have issued yourselves. You will find therein the grants set out "housing subsidies, £10,000,000." You have said yourself that the country requires at least 500,000—

The PRIME MINISTER: That is purely for the loss.

Mr. HOGGE: Take it at that. Does the right hon. Gentleman believe, in view of the estimates that are being drafted by the local authorities all over the country, and the increasing cost of materials and wages and things of that kind, that £10,000,000 is going to be all the money he requires to meet the margin of loss? I am sure the right hon. Gentleman does not believe it, and I know if he does, and if it requires more, that he will find it, because it is part of his policy and he cannot continue in office unless he finds it. He must find it, because it is his promise and his pledge to the people of the country, and he must have at the back of his mind the kind of knowledge—I am free to admit this, and I will give him this point, that in this Debate so far a great deal of the criticism which has been referred to as clatter outside and chatter inside has not been to the point. But, after all, we do not want to make too strictly party points out of a grave national financial situation, nobody would desire to do that, but the right hon. Gentleman must see my point that he has not taken enough money for this purpose.
There is another question I wish him to bear in mind. It is with regard to the debt charge. If he looks at the White Paper he will find that when the Chancellor of the Exchequer was speaking, on 30th April, in introducing the Budget—this is a very important point as showing that the White Paper is not accurate and that we have not reached foundation at all in our criticisms to-day—he said
The debt charge I place at £400,000,000, including the Sinking Fund of a ½per cent.
In the interval between 30th April, when the Chancellor made this speech, and the issue of this White Paper, the National Debt has increased from £7,685,000,000 to £8,075,000,000. That is to say, roughly, that the National Debt in the interval has increased by £400,000,000. On 30th April the Chancellor of the Exchequer took £400,000,000 as the debt charge, and I want to ask the Prime Minister whether he has noticed that in the White Paper the
Chancellor only takes £360,000,000, or a difference of £40,000,000, in providing for the extinction of the National Debt, which has gone up £400,000,000 in the interval. What is Vie explanation? I do not know who is going to deal with that point finally, when we come to it, but can my right hon. Friend tell us? He referred to the fact that the provision of ½ per cert. to get rid of a National Debt of that amount in fifty years was something that would resound through the world. What I am saying will not, of course, resound through the world. I am not sure that it will even get a response from the Government Bench. But when the Government come with their White Paper and provide £360,000,000 to meet a National Debt which has gone up by over £400,000,000 are we going to believe that the Chancellor of the Exchequer or the Prime Minister really know what they are talking about? After all, in the excitement of the War figures and sums of money were easily misplaced, but the Chancellor of the Exchequer has committed himself to black and white. Can my right hon. Friend the Prime Minister assure me that the figure of £360,000,000 is all right? Is that the figure? He does not know, otherwise he would respond and respond at once. Surely we are entitled to put that question to the Prime Minister.

The PRIME MINISTER: I beg the hon. Gentleman's pardon. He has really no right to ask a series of interrogatories on this matter. He has no right to put thirty or forty questions, and to ask a Minister to get up at once and reply.

Mr. HOGGE: I will relieve my right hon. Friend from the anxiety of answering thirty or forty. I will ask him to answer only one. He gives us a White Paper, in which lie states the facts for a normal year. The Prime Minister is responsible for that Paper. Be has come down to debate that subject in the House. He and his friends would have gone to a Division a short time ago, without that point ever having been spoken to in the House. In the White Paper £360,000,000 is provided for a National Debt, which is over £400,000,000 greater than it was at a tine when £400,000,000 was provided for it. Does he say that £360,000,000 is enough? If so, what comes of the provision in April of £400,000,000 for a less debt? You cannot have it both ways. I am not complaining; this kind of thing happens over and over again. My hon. Friend may have
omitted to look into it. The country can not afford to have another financial mess. It is all very well for the newspapers which back the Government to back them when they are winning on a flowing tide in this House, but the Income Tax collector and General Tax collector are the men we have to deal with, and not the Prime Minister. It is the nation that has to foot the bill, in whatever phraseology it is presented to-day by the Prime Minister. The Prime Minister can disguise anything. He has presented a case this afternoon which leads the nation to believe that everything is all right in the best of all possible worlds below, and that it is our duty to back him so that confidence in our credit all over the world shall be restored; and at the moment when he says that 1 draw his attention to a financial provision in the White Paper which is at variance with what has happened, and I get no answer.
Finally, I want to say that the Prime Minister has evaded and eluded the only real question that matters in this Amendment, and that is the question of a Capital Levy. We were promised by the Chancellor of the Exchequer that at any rate we would have an inquiry into the possibility of imposing a levy on war profits. Can the Prime Minister tell the House that that is a firm offer, or is it still in the region of consideration? Is there to be set up a Committee to investigate the practicability of a tax upon war profits? I assume that there is, and on that assumption I want to make two suggestions to the Prime Minister. Personally, I believe both in the desirability and practicability -of a Capital Levy; a great many men outside and inside the House believe otherwise. Everybody is unanimous, however, about the inquiry into war profits. In my view you cannot inquire into war profits unless at the same time you inquire into the whole subject of a Capital Levy. I want to suggest to the Prime Minister that if he is going to give the assurance of this partial inquiry into war profits, he should extend the scope of the inquiry and see Low far the proposal for a Capital Levy is also practicable. The machinery of this inquiry will cost money; it will take up the time of Members of the House. Those who go into the inquiry cannot possibly touch it unless at the same time they deal with the wider question of the Capital Levy. Why two bites at one cherry?
My second suggestion is this: In view of the criticisms of the White Paper the Prime Minister should refer the matter to the National Expenditure Committee of this House, so that they can go into the figures presented by the Chancellor of the Exchequer and say how far they are accurate. That is all I have to say. I have tried to speak not in any accrimonious spirit, because, after all, we are always partners in the one nation. We all have to shoulder the burden which the War has brought, and we all want to get out of it in the easiest possible way for the nation, and we all desire to see the nation once more flowing in those channels of industrial greatness in which it has flown in the past. That is the spirit in which we have addressed ourselves to this Debate. I am certain that the House would have done itself a grave injustice if it had gone to a Division without discussing in all its details the biggest question that we can face at this moment, a question which, unless it is settled, will drag this country down, and a question which, if settled, will enable us to build on new foundations a greater nation than we have known yet.

Mr. SEDDON: The last speaker made a great show against a Division being taken at this moment. He overlooked the fact that had the Division taken place it would have been on an Amendment, and that the demand made by the Amendment he bad never touched. The Amendment referred to special measures to include the imposition of a levy on capital. There is a distinct difference between a mandatory demand on the Government to impose a levy on capital and the position he took up for an inquiry into that particular question. While I join whole-heartedly in appreciation not only of the temperate speech the right lion Gentleman (Mr. Clynes) delivered, the breadth of his vision, and the statesmanship he gave expression to, I noticed that he did not address himself to the intention of the Amendment. I am not at all sorry that the Debate has continued on more general lines, although presumably we are still discussing the Amendment. Had we gone to a Division I should have been in doubt as to whether we were voting upon the speech of the right hon. Gentleman or upon the Amendment which is in his name, because the whole burden of his speech was a plea for an inquiry. He never made a direct demand for a levy upon capital, as
the Amendment does. I am wondering how he will make his peace with his colleagues. I think no Member of the House can take exception to the broad lines laid down by the. right hon. Gentleman. He said, in effect, that we must have an inquiry upon a Capital Levy, upon war profits, and upon production. Surely the most bloated capitalist in the country can take no exception to such an inquiry ‡ What is the position to-day? There is suspicion amongst the rank and file of working men, suspicion which is being inflamed by statements that cannot be verified, and these statements made by men who are out not to help the country but to destroy it. We have to-day a number of people who are telling the working man that there have been hundreds—and their imagination grows with the number of their speeches —that there have been thousands and thousands of millions made in war profits. There is no means of ascertaining what is the sum total of war profits. I have been given various figures. I have been told by a reliable authority that if the Government does proceed to take war profits they will get about £50,000,000 sterling. In reference to a Levy tin Capital an inquiry would dissipate some of the illusions which are being fostered on platforms.
It was said by the Noble Lord (Lord R. Cecil), and I believe it, that the men who in this country were prepared to give their lives for their country would take no exception to giving the wealth of the country if the country needed it. What we want is an inquiry into the capital of the country, to see whether, without the dislocation of industry, those who have great possessions could give an immediate contribution to stabilise our credit and alter the rates of exchange. It has been suggested—I am not giving my assent to it—that we ought to treat the present position as though we were all deemed to have died under the same provisions as the Death Duties, and that if that was put into operation we would receive enough capital to meet all our liabilities and start with a clean sheet. There may be something in it. There can be no harm done by adopting the suggestion of an inquiry both into a Capital Levy and into production. I am convinced that the average Britisher, whatever may be the intention of agitators, only wants a fair and square deal, and, if he believes he is getting that, agitation and revolution will not be possible. One right hon. Gentleman opposite
said that what the Labour party wanted was that this question should be grappled with effectively and immediately. I am sure that is what everyone wants. We all know what is the financial position of the country; we have all seen the scare lines in the papers; we have the new idea of a political programme as exemplified by the by-election at Thanet, where a candidate selected has reduced his political programme to a fight on one subject, and hopes to come into the House with the object of doing away with the wasters. There is a general suspicion throughout the country that there is waste, and that a number of people are evading their obligations. I believe the intention of every section in contributing to the Debate is, as far as possible, to help the Government to meet the position in which we find ourselves at the present moment. Sometimes it is wise to go back to the old days of this House. We have not got all the wisdom of 1919. There have been great financiers who have sat on these benches, and there have been great thinkers who have given us words of wisdom that are not yet out of date. I find in the writings of the late Professor Lecky a sentence which we would do well to take to heart. He wrote:
Nations seldom realise till too late how prominent a place a sound system of finance holds among the vital elements of national stability and well-being; how far political changes are worth purchasing by its sacrifice, and how widely and seriously man's happiness is affected by the downfall or perturbation of national credit by excessive and injudicious taxation.
I venture to suggest that if there is a tendency in some direction to bring about industrial chaos in this country by excessive and injudicious taxation our last state will be worse than the first. I am sure everyone listened with pleasure to the speech of the Chancellor of the Exchequer, which has been described as both manly and massive. I think the right hon. Gentleman might in his leisure moments, if he has any, turn over a a few pages of "The Life of the Late W. E. Gladstone," written by Lord Morley. He will there find it stated that when that great and distinguished statesman was dealing with his Budget he had the signal distinction of creating public opinion by which he worked up the warm climate in which his projects throve. I am sure that yesterday the Chancellor of the Exchequer did something towards creating such a climate as will, I hope, enable him to go on with his
good work and to realise the anticipations contained in his speech. I want to deal with one item which has already been touched upon both by the right hon. Gentleman the Member for Miles Platting (Mr. Clynes) and also by the Noble Lord the Member for Hitchin (Lord B. Cecil). It is the question of subsidies. I entirely agree with all the right hon. Gentleman said. It is not good business for any industry to be bolstered up by subsidies, and the more subsidies you have the greater are the dangers to the financial stability of the country I have in my hand a list of the subsidies being given at the present time, and I find that for the year ending 31st March, 1920, provision is made for the payment of £191,385,000 under that heading. I would like to ask the right hon. Gentleman is it necessary to continue the subsidy for nonferrous metals which, according to the estimate, is going to cost the country £6,885,000. Then there is the British-Italian Corporation, whatever that may be; £50,000 is set aside for that. Assistance to the dye industry is put down at 1750,000. According to the White Paper, the figure was £1,800,000. I want to know what has caused the discrepancy between the two estimates. Then I come to the question of the coal mines. Here we have a definite figure of £25,400,000. During October a question was put with reference to excess profits arising out of coal, and an hon. Member for South Wales interjected the supplementary inquiry, "Is it correct to say that some collieries are making 5s. per ton? "The reply was, no answer could be given on that particular point. But as to what they would make when the is. 2d. arrangement was carried out, there will be some collieries making a dead loss. I want to know this. We were told during the great coal crisis that we were to pay an increase of 6s. per ton on coal and that that was to be a burden on industry, a necessary burden, which would also be borne by every coal consumer. We were told it was required to do away with the subsidy on coal. Although we have the fact staring us in the face that the cost of coal has been increased by 6s. per ton, we have yet, according to the White Paper, to cover a loss of £25,400,000 on coal. How is that?
Then I come to the question of the railways. Here again the figures are confusing and misleading. But there is a
general idea in the country—and I want the Government to take note of it, because it was one of the causes of unrest and of the railway strike—there is a general feeling among the people in this country that the Government have cooked the figures so far as the railways are concerned. It is said that the Government as users of the railways have not paid what would be charged to other users for the same services. Surely in the interests of industrial peace and in the interests of fair budgeting and of honest finance, we ought to know whether the Government have charged themselves reduced sums which, if they had been placed to the debit of the Government would have wiped out the deficit we have to face at the present time. Another item I see here is one of £3,000,000 for coastwise shipping, and there are further items of £950,000 for canals, £50,000,000 for the bread subsidy, £34,500,000 for unemployment, £2,480,000 for telegraphs, and £2,370,000 for telephones, so that we get a grand total of £191,385,000.
It has been said time and time again, and it cannot be too often repeated, that this country is carrying a burden that will tax the sagacity, strength, statesmanship and industry of every able-bodied member of the community. In the Prime: Minister's moving speech and in his peroration he called to mind what we have done in the great War, that we have created this debt of £18,000,000,000. Here again, we have no proper set of figures. Some people give one total and some another. But whatever the figure may be, this national debt has been created to save the life of the country, and we have to settle down and see to it that we save the country from disaster if only out of respect for the men who have lain down their lives in saving the Country. We often hear about a "business Government." That phrase has been parrotted and repeated until it has become hopeless to a great number of people. You can no more run the country in a slipshod manner than you can run a business. To run a. country is a highly technical business that wants the best brains and the closest application. In the matter of statistics there is hardly a Member of this House who does not find it the most difficult thing in the world to follow the figures that are given. Surely with all this suspicion in the country that the figures are cooked and manipulated, it is not beyond the bounds of possibility to allay that suspicion.
Let us have men sent into every Government Department who really understand finance. There is as much rivalry between one Government Department and another as there is between half a dozen young fellows who are all after the same girl. This rivalry between Government Departments has been prolific of enormous and wasteful expenditure during the War, and if the right hon. Gentleman will get a few private detectives who are not out for pensions as retired Civil servants to make inquiries, he will find that there are men responsible for expenditure who have been given war honours who, had they got their deserts, would have been in gaol. We are now starting to repair the shattered fortunes of the country. Surely, recognising our responsibility as we all do, it is not asking too much that we should have a real business Government, and that every Government Department shall have its Finance Budget thoroughly examined, and if there is too much expenditure proposed, it shall be cut down ‡ I have much sympathy with the Noble Lord the Member for Hitchin, and I believe, with him, it would be sound economy if the Chancellor of the Exchequer would take his courage in both hands next. March and say to the head of every spending Department, "You will only have so much, and you must cut your coat according to your cloth." A good many tears would be shed thereat in Whitehall, but there would at the same time be a good deal of rejoicing amongst the taxpayers. I want to urge on the right hon. Gentleman that there is genuine concern in the country on this question, and that it does not merely consist of newspaper scare lines. His speech has given us some confidence. It will certainly reassure a large number of people. Let him go on with his good work, and give still greater assurances, knowing full well that by steadying the country he is helping it to recover from the effects of war and to rebuild it on better and safer lines.

Sir D. MACLEAN: On a point of Order. If an Amendment were moved now to the Amendment before the House on the lines of providing that an inquiry should be first held into the proposal for the imposition of a Levy on Capital, would it have the effect of limiting the Debate? If it would, that certainly would not be in accordance with the wishes of the House, and I would ask whether it would
not be a more convenient time to mote such an Amendment at the close of the Debate and immediately before the Division?

Mr. SPEAKER: if and when the present Amendment becomes a substantive Motion, such an Amendment to the Amendment, as is suggested, would be permissible, but the effect would be, of course, to limit the Debate strictly to that Amendment to the Amendment.

Mr. TYSON WILSON: If a decision is taken on the present Amendment now, cannot the Debate be continued either on general lines or on a further Amendment to the Resolution?

Mr. SPEAKER: If a Division were taken on the Amendment before the House, and it were to be negatived, that would cut out the Amendment to the Amendment which has just been suggested by the Leader of the Liberal Opposition.

Lieut.-Commander YOUNG: I claim the indulgence which the House is ever willing to show to one who addresses it for the first time, and I desire to deal with the question of the Government's policy as regards borrowing, and particularly as regards those methods of borrowing which in the opinion of many are guilty of the mischief of the inflation of currency and credit. This is an arid region in which one does not desire to detain the Home for more than a brief period. Let me recall to the memory of the House the chief feature of our war finance, which has been that we have paid for the war, not out of the savings directly of the country, but in the form of overdrafts upon bankers, which have not yet been repaid. We might have done it otherwise, but the Government—and all Governments during the War are, if I may use the expression, in the same boat—preferred to the hard path of taxation the easier path of the manufacture of purchasing power in the form of currency and credit, and, using that in competition with the purchasing power of the country, obtained the goods and services required for the conduct of the War. Evidence of that is not far to seek. It is present at hand in the enormous increase in the legal tender currency of the country. If I remember right, immediately before the War, £180,000,000 was available for currency in bills and notes, but the last bank return on a reasonable
estimate shows us the increase to be £500,000,000 of legal tender currency notes and money available in the country. I certainly do not desire to embark on that most difficult and thorny controversy as to what is the true measure of inflation, whether it be due in the first place to inflated currency or to inflated credit. It is due either to one or the other.
I have referred to the figures of inflated currency. Let me now refer equally to the figures of inflated credit. Immediately before the War, if my memory holds good, the total bank deposits of the principal banks of the country amounted in mid-June, 1914, to the sum of £700,000,000. In the last return they amount to the figure of £1,700,000,000. I refer to these figures only as a measure of the extent to which the legal tender currency on the one hand and the credit of the country on the other hand have been inflated by the operations of the Government during the War. Think of the enormous increase in the purchasing power, an increase clue entirely to Government borrowings, and accompanied by no increase in the true wealth, in the true savings of the country. What is the consequence? The consequence of this inflation of currency and credit, owing to Government borrowing unaccompanied by any increase in the savings, in the wealth of the country, is, of course, seen in the enormous rise in prices. To come more closely into touch with what is still amiss in this process, the machinery of this process of inflation of credit or of currency—I care not which it be—is well known. The inflation is due in the first place to encouraging the joint stock banks to create credits in order to lend them to investors to enable them to purchase Government loans. That is bad, but it has a redeeming feature, and that is that as the investors accumulate their savings they automatically pay off the banks and thus reduce the actually created credit. It is due in the second place to the flotation of Treasury Bills and other Floating Debts, and that is worse, because there is no automatic reduction of the credit created; but it has this redeeming feature at least, -that the actual amount of inflation of credits in the creation of Treasury Bills is no greater than the actual amount of credit received by the Government.
Finally, the process of the manufacture of credit has been carried on by the process which, as we have already heard from
the speech of the Chancellor of the Exchequer, he agrees—and all. indeed, know —to be the worst process of all in burrowing, namely, the creation of credit by die means of deficiency advances. This means that a banker creates a credit by a stroke of the pen in his book and puts it at the disposal of the Government. That is the very worst of all, because by the process well known to the banking community which is the result of our centralised banking system, and to explain which I will not delay and weary the House, the effect of a deficiency advance is the creation in the hands of the joint stock banks of a total amount of credit equal to an estimated amount of at least four or five times the original credit which was received by the Government, so that the inflation there is disproportionate to the actual relief to the Exchequer. Those are the processes by which credit has been created during the War, currency inflated, and prices raised up. They are processes which, in their effect upon the stiffening of prices and the depreciation of the sovereign, have mischievous effects which all recognise. They are still in continuance. At the present time the deficiency advances outstanding amount to the figure of 1242,000,000. The reduction in the course of the past two weeks—I make no-comment on the fact that the reduction has been caused in the course of the last two weeks—in the figures of deficiency advances has been the substantial one of £130,000,000. I am sure that that announcement and the credit which was-claimed, and most legitimately claimed, by the Chancellor of the Exchequer for that reduction in the course of his opening speech is admitted and recognised. it is the most bright point in the recent efforts of Treasury finance; but how has it been achieved? It is not by the fixation of the debt set oil against true investments, but by the flotation of Treasury Bills. That is not out of the frying pan into the fire, but it is certainly no better than coming out of the fire into the frying pan. The second stage is, indeed, better than the first; the Treasury Bill is better than the deficiency advance, but the last stage is not in itself intrinsically happy.
I said the true danger and the true unsoundness of the present methods by which this enormous deficit of £474,000,000 is being covered is this continued process of the manufacture of credit. It is not being manufactured by the creation of deficiency
advances, no doubt—not directly so—but if we look at the figure of Treasury Bills, there we see the process of the manufacture of credit still in continuation. At the present moment, on the last date available, and as the Chancellor of the Exchequer has already informed us in his speech, the amount of Treasury Bills outstanding is £1,044,000,000. I W1Sh to lay particular emphasis upon this, that that figure has been increased in the course of the last two weeks by the figure of no less than £114,000,000. I would not for a moment contend that the whole of that £114,000,000 is necessarily the manufacture of credit and that it at all necessarily adds to the direct stiffening of prices and the depreciation of the sovereign, but I would say that most certainly it is a matter of common experience and generally admitted knowledge that the effect of such an enormous and rapid increase in Treasury Bills is that, not unusual indeed in the history of war finance but only surprising to one who casts Ins mind back to the recollection of peace finance; but the probable and inevitable effect of the issue of Treasury Bills in such amounts is the creation of credit and the inflation of the purchasing power of the country at the expense of prices. We have heard a most encouraging assurance from the Chancellor of the Exchequer as to the creation of deficiency advances in future. I am not sure that I should go so high as to call it an encouraging assurance, but it is a most refreshing and pious hope. He told us that he hopes he may be able to obtain the necessary money in the form of Treasury Bills and that further recourse to Ways and Means advances will not be required. That is good to hear, but it would be better still to hear that the time had now arrived when the Chancellor of the Exchequer could give us an assurance that. in future he would be able, so long after the War has ceased, to carry on the finances of the country absolutely without further recourse to these desperate and most mischievous methods of borrowing.

Mr. CHAMBERLAIN: Will the hon. and gallant Member permit me for one moment? I am' sorry to interrupt his very interesting speech, but I do so because I think he may like to hear the statement that I would make. By the Victory Loan I had, of course, hoped to fund a portion of the Floating Debt. I have been obliged. to abandon that hope, but by the borrowing clone under the Victory Loan I have;
obtained sufficient money in cash to meet the deficit of the current year. If I had banked that money there would be no additional borrowing; there would be only the debt which fell due within the year to be renewed, but there would be no additional borrowing. Of course, I have not banked the money; I have used it meantime to diminish temporarily the Floating Debt, and, of course, la that: extent the Treasury Bills must be increased during the remaining portion of this year.

8.0 P.M.

Lieut.-Commander YOUNG: I am indebted for the most interesting explanation of the right hon. Gentleman, which makes the matter very much clearer to me and, I have no doubt, to all Members of the House. But I would put this one point to him, in order to obtain what I consider is a matter of principle, in as few and as clear words as possible. May I supplement—for, after all, I am doing no more than supplement—what was said by the Noble Lord the Member for Hitchin? May I put this point to the right hon. Gentleman as a matter for consideration? Will it be possible in the future to confine the use of deficiency advances to the purpose for which they were originally devised and intended by our scheme of finance, that is, for the anticipation, for short periods only, of small amounts of revenue which are in sight? Those are the contentions I desire to advance. I have ventured to contend that, at the present time, in order to cover this deficit, we are continuing a process which must inevitably lead largely to the increased manufacture of paper credit, which tends to swell prices and depreciate the sovereign. From that vicious circle of inflation of credit and rise in prices, I do net think any man can suggest any simple escape in the form of financial expedients. There is no escape except in those expedients so often advanced on both sides in the Debate—in the first place, a rigorous reduction of expenditure to its absolutely irreducible minimum, and, in the second place, an increase of revenue in order to reduce as far as possible the proportion which it is necessary to raise by borrowing. Even those two expedients cannot bring the two ends together. If I may say so, there must he a meticulous observance, on the part of those who design our policy of borrowing, of this principle, that borrowing should be confined to what the nation can spare out of its true savings,
and should not be by easy manufacture of credit. During the War we had one preeminent object to gain—the object of victory. If victory could only have been gained by unsound finance we should have said, "Let finance be unsound, because it is less important than gaining victory." Now that pre-eminent object is gained, I venture to contend that no object ought for a moment to be allowed to take precedence of what is now pre-eminent—a return to sounder methods of finance.

Mr. HAI LWOOD: May I congratulate the hon. and gallant Member on having given to the House a very interesting maiden speech It is quite apparent that he, at any rate, understands finance with a thoroughness which ought to be of great service in this Debate. I am not going to attempt to follow him in the various intricacies of the Floating Debt, or the Funded Debt., but may 1 point out that we have had a good many theories propounded at various times as to the cause of the rise in the cost of living? I do not know that there is anything more sensitive than the wheat market, and the price of bread in normal times as a reflex in this way, and yet we find it is in contra-distinction and in contradiction to some of the theories held by some of the expert financiers. For instance, in 1906, just after the close of the Boer War, bread was considerably cheaper, and wheat was considerably cheaper than it was some years afterwards, although a big proportion of the National Debt had been paid off. So that, however sound some of the financiers may think their theories are, sometimes they are upset by hard facts, such as these. We know the wonderful theory of some of the financiers before this War started, that the financial stability of Germany would be unable to hold out more than five or six weeks if she dared to go to war. And those theories were put forward by expert financiers in whom we are supposed to put our trust.
This Debate has gone on for some considerable time, and I would not endeavour to intrude myself on the patience of this House, unless I felt that I had one or two points that might be brought out—if I may say it without any egotism on my part—that would be of some value to the cause of the Debate. We are discussing an Amendment moved by the right hon. Gentleman who sits for an adjacent Division of Manchester to that which I hold,
and we know that his speech was a very level and a very well-reasoned speech. On a good many points I can see eye to-eye with him, but on the main point of his -Amendment I beg respectfully to differ. I differ, not because I am possessed of a great amount of capital, and am afraid of it being touched, but I differ because of the gross injustice which his proposal would inflict on a big section of the community. And I go further. One speaker wished, as it were, to whittle clown this Amendment by proposing another Amendment, that an inquiry should be held. I strongly object to that. I believe that we are quite capable of settling in this House whether a levy on capital is advisable or not. It was mentioned frequently in the course of the Debate yesterday that the mere discussion of this and the mere raising of it causes uneasiness in the country, and is fraught with danger to the stability of many businesses. We have only the two ideas before our minds—whether revenue should be raised by taxation of income or whether it should be raised by taxation of capital. If we look at some of the business men who have developed their businesses by credit to a great extent, we find in a good many instances that a man making £500 a year is capable in the process of several years, when he has accumulated probably £4,000 or £5,000, of making £1,000 out of the business, the extra £500 being due to the thrift he has put into that business and the capital lie has accumulated. If you take away that small amount of capital he has in the business you will also deplete Ids earning power. On the other hand, we know that there are plenty of professional men, whether they are barristers, solicitors, or doctors, who can quite easily make £1,000 a year. Under the proposal that is put forward by the right hon. Gentleman (Mr. Celynes) the business man would have an extra tax inflicted upon him, while the professional man, who was probably making more money, would go scot free. Is this justice? Would it be fair that even an inquiry should be set up by this House to inquire into the advisability of a tax on capital when we know straightaway that the thing is unjust? On the other hand, nobody can depreciate or reduce his capital in any business unless at the same time he increases his credit. If the capital is reduced, he must either draw in the credit lie is giving to other people, or he
must take more credit from the people with whom he is trading in order to carry on his business.
We are all agreed in the House that the difficulties of the present moment can only be overcome by increased production, and in this I am supported by members of the Labour party who have spoken several times on this subject, and it may sound like redundancy to repeat it, but it is necessary in order to evolve my argument properly that we should realise that, after all, this is the only way of getting out of our present difficulties. We must produce more than we consume. In regard to the proposal to levy a tax on capital, supposing that we could by some system take away the capital from individuals and place it to the credit of the State, and liquidate at the same time the National Debt, if we could transfer from one side of the book, as it were, to the other this mass of capital, should we have produced anything? Consequently, by a little process of reasoning, we can see that we should be no better off when we finished. The nation would not be a fraction better off if you could liquidate the debt to-morrow by taking away capital from individuals. As a nation we should remain just as we were, except that we should be considerably worse in this respect: In order that individual firms could carry on, they would have to pay more for the credit than what the Government would have to pay for the National Debt, and those people who know anything about business know that those who are competing with a firm whose credit is in jeopardy can compete on better terms because they can buy and produce better. The whole nation is better off if the Government shoulder this responsibility of credit rather than that it should be saddled on individuals.
Having dealt with that point, I am quite convinced that there is only one way of meeting our difficulties, and that is by rigid economy on the one hand and by increased taxation on the other. I was very pleased that the Chancellor of the Exchequer came down to the House yesterday and was able to give a better account of the nation's finances than he was able to do in August, but, at the same time, I was disappointed on one point., which I must frankly confess. I noticed particularly that the House was full, gave him a very patient hearing, and was very interested in his speech for about three-quarters of the way. About
three-quarters of the way through the speech the Chancellor of the Exchequer told the House that there would be no further taxation, whereupon the intense interest in the House immediately began to melt, and various hon. Members found a sudden engagement in the Tea Room. That is the point I want to bring home, if I may be allowed to offer a little criticism to the Chancellor of the Exchequer. I would much rather that he had come down with a different viewpoint, because, after all, this is the chief thing that stands out of his speech, that there is going to be no further taxation. I think the Chancellor of the Exchequer ought to have come to the House with the determination to make his Budget balance, and he ought to have told the House plainly that it has got to be made to balance either by economy or increased taxation. But the main thing is, the Budget must balance. Instead of that we all left with the idea that the main thing was that there were not going to be any new taxation. I was very pleased to hear that the right hon. Gentleman opposite (Mr. Clynes) was in favour of the abolition of the bread subsidy. On this point I think I can offer a few views that might be of some service to the Government. I believe that the Government would readily get rid of the bread subsidy straight away only that they are afraid it might cause difficulty in the country. With this point of view I have a great deal of sympathy. I must say if bread were suddenly to go up from 9d. or 9½d. to ls.1d. there might be some difficulty in the country to meet, but I hope and trust that the Government will never do anything so foolish as this. In fact, with regard to the withdrawal of the unemployment donation, too, although I have been against it all along, -I think it would be rather unwise suddenly to withdraw' it, as they propose, on 21st November. In that case I think it ought to have been a gradual reduction of 2s. per month until the donation was extinguished.
In respect to the bread subsidy, I should like to say that I do not believe that control is at all necessary. There is no trade in this country in which competition is so highly developed as in the bread trade. Anyone may buy a gold watch once in a lifetime, or in a generation, and may know very little about the value of it. In the bread trade, however, bread is being bought several times a day in the poorer
districts, and the public very sensitive as to u here they are able to get the best value. In every town and city there are hundreds of bakers competing for the business, and the Government need have no fear but that the competition will prevent the price from ascending unnecessarily. We know that recently the Food Controller has increased the maximum price of bread from 9d. to 9½d., yet in Manchester and various parts of the country bread is still being sold at 9d. The bakers have not taken advantage of the possibility of raising their price by the halfpenny. Competition has kept it down to ad. On the other hand, there was a difficulty in various parts of tile country and with various bakers in making their business pay while they were compelled to sell the loaf at 9d. This was a contributory cause of the bread strike when bread went off the market because the bakers were not allowed to raise the price to 9d. This teaches us a valuable lesson which we ought to take to heart in this House, and it is that the Food Controller has no control over the price of food. If he fixes his price too high competition will bring it down, and if he fixes it too low you cannot get the article.

Mr. J. JONES: What about cooperation?

Mr. HAILWOOD: The price of rabbits, cheese, apples, and potatoes were fixed and at such a price that it did not pay to sell them, and immediately those articles went ell the market. At the same time it is immaterial whether the Food Controller fixes tile price or not; and if be put it at Is. 9d. bread would not go up any further than to-day. We know in regard to apples he fixed the price at 9d. and yet you can buy them at 3d. and 7d. a lb., showing that there again he has no control whatever. My contention is that the Food Controller has no more control over the price of an article in this country than King Canute had over the waves. I ask whether it is reasonable for the Government keeping a palatial place of this sort with a Minister with a salary of £2,000 with an attempt on the part of the Government to raise it to £,5,000? Is it economy. Is he doing any good? With regard to the price of any article of food I ask if the time has not come when the Ministry of Food should be closed up. I do not want the Government, as I say, to do anything so rash as to take away the subsidy from
bread and to run the price up to 1s. ld. the next day. That course is fraught with great danger. But I have, I think, established the point that the Food Controller has no control over the price of bread, and that it would be quite possible for the Food Controller to withdraw his control over the price of bread to-morrow morning, and leave the subsidy as it is at the moment; then he could gradually increase the price of flour by 2s. per month until the subsidy was entirely liquidated. In this way you will have a gradual rise in the price of bread until such time as the price of wheat came down—which, we hope, by importations from Australia and elsewhere will happen—until the whole thing becomes liquidated.
The Chancellor of the Exchequer, however, has held out no hope Tint this subsidy is going to be withdrawn at any early date. Although we have an imaginary normal year's Budget drawn up for us I am rather afraid that unless something is done very speedily we shall be going on for a considerable time with this bread subsidy. I contend that the time has come when bread should be decontrolled, and the price of flour should be raised gradually until the subsidy is entirely liquidated. I also wish to support the idea that the unemployment dole should be withdrawn. I would go further than that. I think the time has come when you might close up the Ministry of Labour altogether. [HON MEMBERS: Oh, oh ‡ "]

Mr. J. JON ES: Shut them all up.

Mr. HA1LWOOD: I do not know what use the Labour Exchanges are to this country. I know if we want a man we find him better by calling up the headquarters of the trade union, who are better able to know the kind of man we require and to send him along. If we apply to Labour Exchanges it takes them three or four days before they find a man to send, and then he knows absolutely nothing about the job. That is about as far as we have been able to get up till now. That, I think, is pretty much the experience of individuals throughout the country. Great economies could be, I think, effected in the way I have suggested, but it is no use reducing the staffs of Government Departments and have those Departments working inefficiently. That is the wrong kind of economy. The Government should make up their minds
which Departments they can do without and close them up entirely as luxuries. I hope that a firm stand will be taken by the Chancellor of the Exchequer in the way of a reduction, and that next year, at any rate, we shall come to the House with a Budget that really does balance.

Mr. BILLING: Any hon. Member of this House rising after the speech of my hon. and gallant Friend behind me (Lieut.-Commander Young) would not be doing his duty unless he expressed his appreciation of the intimate knowledge which that hon. and gallant Member showed of finance. I have listened to many maiden speeches, but I have never listened to one before which I might almost say was such an education to hon. Members. The hon. and gallant Member dealt with finance, but I have always regarded finance as something which was more or less mental as distinct from something which was more or less physical. I have listened to many speeches, not only from the Treasury Bench, but from every part of the House, and I have become absolutely appalled with the juggling of figures. Hon Members seemed to have developed what I would call "the million mind," and a million one way or the other does not seem to matter to them. When the House of Commons gets into that state the discussing; of finance becomes something in the nature of a joke, and we must get down to essentials.
Those of us who have taken the trouble to read our history, or even the information one may derive from a shilling edition of the history of the French Republic or any other recorded revolution that the world has experienced, know that there has never been a war or revolution in regard to which, within twelve months after it, an exactly similar debate has not taken place in the assemblies concerned to that which has taken place here. This War has proved the fallacy of the gold standard, which I submit was always a fallacy, and a means of those who had juggling to the delusion of those who had not. The War has destroyed that standard, and has set up a paper standard, which has not been appreciated by us. We do not understand what it means, and although I claim no intimate knowledge of international finance, yet I have the audacity to get up and discuss it, because when we are all talking about something we do not understand we are all on equal terms. The mere discussion of millions of currency
and all these things does not matter, and they only tend to impress more forcibly on my mind what is the essential wealth of this country. It is exactly the same to-day as it was when we painted our skins instead of dressing ourselves as we do now. The essential wealth of the country is production, and it is a question whether we are going to produce more or economise more.
It has been suggested that we should immediately economise. That is a very admirable suggestion, but this Debate has suggested to me a sort of meeting of creditors. John Bull, being in bankruptcy, he has a meeting of creditors, and some suggest that he should not spend any more. Others suggest that he should starve himself and die, and others suggest that, as he is bankrupt, it does not matter what he spends. It may be considered a good thing in this House to say something which produces a laugh or scores against the Government Benches, and most of all the Prime Minister, but that is only obstruction, and it is not constructive opposition. I am surprised at the very few alternative suggestions we have received from the various critics of the Government. No hon. Member who sat in the last Parliament can say that I have been an out and out supporter of the Government, because I have criticised it on many occasions, but I wish to say now that the Government's task to-day is infinitely more difficult and more serious than the task they had to face during the War, because during that period they had always a very sure card to play when they were in difficulties.' At that time whenever there was any serious opposition to be encountered all they had to do was to play this trump card and say, "We cannot have dissention when the enemy is at our gates," and they played that card from time to time.
To-day they do nut appeal to our patriotism but they are up against what is far more difficult, that is financing Peace. We have all been on the hustings and we have been asked various questions at the meetings we have attended. We have been asked, "Are you in favour of the Housing Scheme," and this and that, and some of us, with our hands on our hearts, and some of us with our hands in our pockets, have answered "yes." I can honestly say I. am in favour of this new world which has been spoken of with derision in this House this afternoon,
and unless the Opposition arc prepared to put up a better proposition than the one they have produced, it is not much use. We had the Housing Bill here and in Committee, and we had various other Bills dealing with reconstruction for the creation of the new world, but what would be much more useful than the criticisms that were made would be some alternative opposition. I consider the Housing Scheme is unsound for one reason that the Government have failed to legislate for human nature.
We have been told that "we must create houses fit for heroes to live in," and we have either to give our support to the Government to get on with that policy or challenge their existence as a Government and go back to the country. It is no use carping about it. The position of the Government critic is this: either you must support them in the policy they are adopting or you must try to force them to the country. It is no 'good going into the Lobby against the Government simply in order to have a copy of the OFFICIAL REPORT for that day to show you have voted against the Government. I suggest that we must be more conscientious than that. We must either help the Government through with their very heavy task or force them to go to the country to get a new mandate. There can be no middle course. It has been asked: Who are you going to put in their place? If either the Labour party or the Liberal party or any other party in this House would put up anything in the nature of a constructive programme and would show any possibility of its being likely to hear fruit, and better fruit than the refreshing fruit which we have been offered, I Would support them, but I have heard nothing in this Parliament. I have never heard any speech made by ally man in opposition in this House which has suggested that he was capable of being constructive as distinct from obstructive. If the Government are spending money, let us criticise their expenditure by all means, but how in the name of goodness can we expect them to decapitalise the War and start out on a programme of reconstruction and economise at the same time? The thing is a pure joke. It may be good political talk, but it is nothing more. The Secretary of State for War (Mr. Churchill) might have made one other point. The cost of our various expeditions is only the cost of man-power The aeroplanes and
the other things which amount to vast figures, to all intents and purposes would have no actual sale. If you tried to sell aeroplanes to-day in the public market you would have to sell them at a heavy discount. Therefore, if it is essential to our national existence that we should send punitive expeditions to various parts of the world, I do not think that it is fair to charge up to the Government all the various munitions of war. The man-power certainly 15 a cost to the country, because under other circumstances they would be demobilised. If we have to keep a standing Army of 250,000 or 100,000—and I do not think any hon. Member suggests that we. should disband our Army entirely—it is a matter of a very small financial difference whether we keep that Army employed in upholding what we have fought for in distant clinics or whether we keep it at home doing nothing. I do assure the House that so far as the stuff they are shooting away is concerned, that we have plenty to go on with for the next ten years. Therefore, although that line of argument may be sensational, it is riot sound financially.
We have not only received constructive propositions from the Opposition, but we have feasted on them in the Press for several years past. Let us have the war profits. What is a war profit? Several papers have been conspicuous in demanding the immediate handing over to the Government of all war profits, but 1 wonder whether they have thought what that means. Let us take one paper that has been most active in demanding war profits. Let us take the "Sunday Pictorial." I have read with considerable interest the articles of the Noble Lord on the question of the recovery of these war profits immediately. 'What will it mean to him? Assuming that this Committee is appointed and that Lord Rothermere is the first witness, lie would naturally say that lie was in favour of the immediate handing over to the nation of all profits directly attributable to the War. The next question would be: "Lord Bother-mere, are you aware that the 'Sunday Pictorial' is a war baby, born in the war, and that it owes its great financial success to the conditions that governed the War?" It is a property which, I suggest, has not cost the Noble Lord anything in proportion to what it has paid him. One is forced to the position that this property must be assessed at a certain value or sold by public auction. I suggest that it is worth
£100,000, arid that it would cost that to anyone who wished to enter the journalistic world by purchasing it. It has a circulation of 2,500,000 copies per week, and it is a wonderful commercial proposition. If we are going for war profits, let us be thorough. I am quite prepared to agree to anything so long as it is done thoroughly and conscientiously. if we are going to have war profits, every property that was born during the War must be regarded as a war venture, must be valued at the cost of it to the person who brought it into existence, and everything over and above that must be taken by the State. There are many newspaper properties to-day the shares in which are higher than they were before the War. If that is the case, their capital must be assessed at the price of the shares on the public market in 1914 and it must be compared with the capital value assessed at the price of the shares on the market to-day, and the difference must. be taken from the company. We cannot have half measures. If half the men who are shouting "Fire ‡" knew that their own clothes were alight we should not hear so much about it.
I am absolutely in favour of taking everything that we can from those men who have used the War as a means of enriching themselves. No man could possibly face an audience or address the House of Commons and say other than that. The question is, How are you going to assess it? The small man, the people who have made and created this demand by ostentatious extravagance, are small fry. The munitioneer who has gone to the various restaurants in London and ordered a bottle of wine for the first time in his life is a nail who has picked up only- what has dropped from the bulging profits of the millionaires as they walked from one Government Department to another. Those people really do not count at all in this matter. A sum of £50,000,000 would account for all those people, but there are thousands of millions that have been acquired by the millionaires and international financiers of the world who juggled in war finance. Do you think you are going to touch them by anything like this? Not at all. You catch the little fry in your net, but you do not catch the big stuff. You will spend probably £10,000,000 in setting up a great bureaucratic Department to get the little man who made, say, a £1,000, while the man who made £5,000,000 or £6,000.000 will
have eminent counsel, and even Members of Parliament, who will go with tears in their eyes pleading on his behalf, and who will demonstrate to tins Committee that their client is really on figures, and he may have got about £8,000,000 poorer than before the War on account of the fall in Government stocks and depreciation. I only wish that Members of Parliament appreciated the fact that all these wonderful committees to be set up have to be paid for out of taxation, and the nearer we get to national bankruptcy the nearer we get to the bottom dog paying and the-nearer we get to the absolute necessity for the producer to produce more. Therefore I would ask Members of Parliament to pause before they set out on these Gilbertian Committees. The profiteer will say, First you took 60 per cent. and then you increased it to 80 per cent., and now you are going to take the other 20 per. cent.
But there is something much worse than that. While that Committee is sitting you will have a condition of industrial unrest, and you will have a condition of nervousness among all the capitalists in this country. It is absolutely essential if industry is going to get an impetus in this country that capital, with all its faults, should have sonic confidence in the Government to protect its investments. Until we can get capital invested it is absolutely essential that the men who have small fortunes should get sufficient confidence from the Administration to invest those small fortunes in commerce. The Chancellor, I think, made a very good point when he suggested that there was every reason to believe that taxation would not in any way affect the various commercial undertakings. 1 would appeal to the good sense of Labour not to introduce or to advocate at the present time any legislation which would be likely to cause a hiatus between now and when the commercial wheels will be turning again. If anything is suggested or any Commissions are set up the various-firms in the country will hold back to see the result before they launch out in their schemes. They are naturally looking after their own interests, as I dare say hon. Members look after theirs. They will not be prepared to start big commercial undertakings and show their full strength if they think they are going to be tripped up within the next three months by some new legislative measure which will take part of their capital away from them, and probably compel them to close those
undertakings. I would suggest to take off all the restrictions put on during the War. Take off every restriction which is tending to arrest imagination, enterprise, and the ability of the citizens of this country. Go on with your reconstruction programme by all means and no one will more heartily support you in this 1-louse than I will, but do not make every man in this country the slave of a bureaucratic machine. Give the brains of this country a chance to employ the brain of the country.

Lieut.-Colonel BUCKLEY: The hon. Member who has just spoken reminded the House of an extremely interesting awl instructive speech delivered earlier this afternoon, and with all lie said about that speech I cordially agree. The hon. Member for South Hackney (Mr. Bottomley) made a bitter attack upon the banking community of the country. When I read the Debate last Session on his proposal for the appropriation of unclaimed bank balances the impression I got was that one thing the hon. Member did not understand was the banking business of this country. That impression has been confirmed by the speech he made this afternoon. He suggested that the bankers had bamboozled the Chancellor of the Exchequer, but the House must not forget that bankers were not permitted to pay more than: 3½per cent., whilst the Government could pay whatever rate they liked. The hon. Member (Mr. Billing) told us he does not understand international finance. I think I must agree with him. The reason why this country is the banker, broker, and forwarding agent of the whole world is because its transactions have always, previous to the War, been covered by gold. The holder of a bill in China could send it to New York, and New York might again send it to Africa, and every man who handled it knew that the moment he presented it in London it would be met by a payment in gold. I am afraid I did not agree with what the hon. and gallant Gentleman (Commander Young) said about Treasury Bills. I have always looked upon Treasury Bills as a very convenient and suitable form of borrowing for the Government. There is always in the great financial centres of London a large amount of surplus credit which it is not convenient for the great financial houses to lock up for any considerable period, and Treasury Bills are a very suitable form of investment,
and it is a convenience to the Government to be able to tap a source which otherwise would not be available to them.
The whole question of national defence is not so much a question of what we can afford but of what we need, and then it must be reviewed in the light of our increased responsibilities. While I will do evertything within the limits of my capacity to forward the League of Nations, I do not propose to agree to allow the League of Nations to dictate to this country what steps it shall take for the defence of its own property. If that policy had been followed in the last twenty or thirty years I do not say we should nave averted the War, but the whole complexion of the War would have been altered, and the very difficult situation we have to deal with to-day would have been much easier than it is. Complaint has been made that no remedies have been suggested for the existing state of affairs. That complaint was made yesterday by the right hon. Gentleman (Mr. Henderson) in his able, moderate, and sensible speech. There is only one remedy for the existing state of things, and that is in the hands of the people themselves. Whichever way you turn, you always come back to the old thing. It is production, production, production the whole time. We shall never be right until we get back to the gold standard—to a free market for gold—and we shall never get back to the free market for gold until we export more goods. That is the only solution.
I feel that the question of currency is by no means the least important part of the whole of this problem, and it is certainly to a very great extent the cause of the industrial unrest that we see today. What we want at present more than anything is a real standard of value, and that is what we have not got. No one knows what the valve of the is going to be from day to day, and for that reason it is absurd to talk of binding the Government down in Estimates. It is ridiculous to talk about doling out so much money for the different Departments, because it is impossible to say what the value of the sovereign will be in twelve months. To my mind, inflation of prices is to a very great extent due to the system on which the Treasury notes are issued. They are issued against the bank deposits, which to a very great extent are artificial. Every rise in wages,
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every increase in the cost of commodities, has its per contrain the increase of deposits in the banks, and the banks are able to draw Treasury notes against their balances in the Bank of England, which means that the more you increase the bank deposits the more Treasury notes the banks will draw. It is an axiom laid down ‡years ago that depreciation of currency always occurs if the production of currency overtakes the production of commodities, and that is what is happening to-day. This is actually the position now, that the gold sovereign, which is the basis of our system, is worth to-day 25s. in credit, and the £90,000,000 odd of gold in the coffers of the Bank of England are actually of an entirely different value from the sovereigns which are represented on the other side of the account. That is an anomalous position. One might suggest that a simple remedy would be to increase the price of gold, and therefore reduce the size of the sovereign, but that is impossible because of our National Debt. I see no real remedy until we can so increase production as to restore the balance of trade, bring the foreign exchanges in our favour, and enable the Bank of England to have a free hand in the raising or lowering of its rates of discount and so attracting gold back to England, and we shall never be able to do that till we produce more goods to send abroad. Whilst we are talking of Select Committees, I rather deprecate the allocating to Select Committees of matters which would be far more satisfactorily discussed on the floor of this House, but I suggest that the question of the currency is one which might receive the attention of a Select Committee with a view to seeing if we can sort out the different transactions which have caused the inflation of prices and find out how many of them are really based upon actual commercial transactions.
It has been said that the Government might possibly abandon some of its schemes for social amelioration. Speaking for myself, and perhaps for a good many others, I for one will be no party to the abandonment of any of our schemes of social amelioration, because I do not see the smallest necessity for it. I think the whole object of our legislation should be directed towards producing a happier, more contented, and more enlightened people, and if we could only do that, the
difficulties which face us would disappear. The hon. Member (Sir C. Kinloch-Cooke) yesterday raised a question as to where the Government was going to borrow the-money for its next loan. I think we must all welcome this Debate if only for the reason that it will have done something to clear the air and restore the credit of the Government, because that is what is most needed. What we want at present is confidence—confidence in the country to recover itself, and confidence in the Government to borrow money. The position to-day reminds me very much of an experience of my own when I was a clerk in a bank many years ago. We had art account which had been for some time overdrawn. One day the client was sent for and asked if he could not take some steps to pay it off. This unfortunate man went away to consult an accountant. The-accountant was unscrupulous and wanted an estate to wind up. He looked at his affairs and said. "My good man, you are insolvent." A meeting of creditors was called the goodwill of the business was destroyed and the man was insolvent. That is what a lot of people are doing to-day, trying to convince the whole world that we are insolvent, and we are nowhere near it and are never going to be. The position is serious. I should be the last person to attempt to minimise it. It is a serious position because of the way the machinery of trade in this country is conducted. I do not think people fully realise what an extraordinarily complicated and delicate thing is the whole of our economic system. It rests upon a credit system of a peculiarly delicate and susceptible nature. Our credit system always reminds me of the instrument for recording earthquakes which records with equal accuracy an earthquake in Japan or a disturbance in Jamaica. So does our credit system act. The failure of the cotton crop, a blight in the wheat zone, a drought in Australia, labour disturbances in England, are all recorded with equal accuracy. Each one of these factors destroys one of the links of the chain, and until the link is repaired the machine will not run with its usual ease and facility.
One thing that our credit system depends upon more than anything else is confidence, and proposals such as are contained in this Resolution are the very finest things you can bring forward to destroy confidence. One has only to go
on change to see that. Everybody is ready to embark on new enterprises, there is capital for new industry or for the development of businesses, but men will not embark upon these things because they do not know what is going to be attacked next. Only a few days ago I met a manufacturer who had accumulated during the "War a good deal of what we call war profits. He wants to extend his works, and to increase his machinery, but lie will not do so until he knows whether he has to disgorge some of the money which he has made owing to the conditions of the War. This is all disturbing to our system of trade, and the suggested remedy is likely to be worse than the disease. I would like to refer to the suggested inquiry into war profits. I always dislike drawing on my own experience in the War, but may I say this, after a service of nearly three years, always in the front line, that there are very few of the horrors of this War that I have not personally experienced, and there are none that I have not seen. I have seen things which I do not like to think about, much less talk about, and if you can produce to me a man who has deliberately fattened out of all this misery, I would not merely confiscate his property, but I am afraid I should be tempted to confiscate his skin as well. But it cannot be done, and there are a great many reasons why it cannot be done. It is nut right to make illegal in 1919 something that was legal in 1914. There is the difficulty of assessment, and the difficulty of deciding what is and what is not war profits. There is also the difficulty of collection. To-day the Inland Revenue is considerably in arrears in the collection of Excess Profits Duty. My own firm have not settled their account for the year 1917, and it is not our fault. There has been a death in the firm, and the settlement of the account has been complicated by the winding up of the estate. Our accountants assure me that the Inland Revenue people are so hard worked that they cannot deal with these complicated estates. Are you going to create a vast mass of machinery to deal with the collection of a sort of revenue which, at the best is entirely problematical? I remember many years ago, I think it was Lord Russell, who introduced a Bill which was actually passed, called the Secret Commissions Act. Everybody knows that secret commissions are going on to-day; they have always gone on and always will go
on, but do you ever hear of that Act today? We never hear of it, because it is no use. It was impossible to impose it, and I ant very much afraid that that will be the difficulty now. At what prices are you going to assess these war profits? On the present basis, or two years hence, or five years hence? It is more than probable that the inflation of prices will in three or four years entirely disappear. How in the name of fortune are you going to decide what a man's war profits will be in 1923? There is one remedy before us to-day, and that is increased production. In order to bring about increased production there are three things that we require. We want first of all retrenchment, secondly, we want industrial peace, and thirdly, We want that combination of effort which has not yet been achieved. Given these three, and with the enormous productive capacity of this country, I am certain that the debt which hangs over us will be met comparatively easily and in a much less space of time than the majority of people imagine.

Sir A. WILLIAMSON: I have listened to this interesting and valuable Debate during the last two days, and one cannot help being struck with the different tone of the speech made by the Chancellor of the Exchequer yesterday and the tone of the speech made August last. I am inclined as a listener and as one who has some acquaintance with business to take the view that both speeches were exaggerated. The speech of August was exaggerated in the direction of giving an alarmist note far beyond what was called for by the facts of the case. I also think that the speech of yesterday was exaggerated in the direction of giving too great a feeling of confidence to the country that all was well, and that effort towards economy both public and private was not required to the extent that in my judgment it is required. A good deal has been said about inflated currency and inflated prices. The House ought. to remember that inflation of currency is not confined to this country, and that when we talk of inflated prices we have to remember that whatever we do here has only a certain amount of effect on world prices. If inflation exists in the United States, in the Argentine, and other countries from which we have to draw our supplies, then we have high prices, however economical we may be, here. Therefore, the lowering of prices
depends very greatly upon world economy, upon world retrenchment, and upon our turning from spending to saving as a world and not only as a nation. Prices will fall when the world begins saving instead of spending.
A great deal has been said about a Capital Levy. The Amendment deals particularly with it. It seems to me that this suggestion, however attractive it may be—and it is attractive—to reduce our debt as rapidly as possible is not practicable. It has been conceded that a Capital Levy would have to fall upon the individual, and that firms or companies could not be selected as the units to whom it should apply. That being so, if you take the case of a shopkeeper who has got a business with a capital of £10,000, he uses that £10,000 in his business, and probably, in addition, uses some credit which is afforded to him by his banker. A Capital Levy is assessed upon lain and, let me assume, he has to pay a sum of £2,000. He is affected in two waysfirst, by the fact that he has only £8,000 with which to run his business instead of £10,000, and, second, as all his neighbours and his bankers know that he has had to pay £2,000, his credit is likewise curtailed. In the next street is another shopkeeper doing a similar business with a similar sum of £10,000. It happens to be owned by a company. That business has no Capital Levy made upon it. Consequently, it has its £1 0,000 capital intact in its business, and it can go on conducting its business with unimpaired resources. It has, moreover, its credit unimpaired, and continues to get its full facilities from the bankers that it preyiously got. The individual is therefore unfairly injured in Ids business in competition with the company.
A great deal has been said about the increment of the assessment of capital which has accrued to individuals during the War. I am not quite sure whether the Chancellor of the Exchequer in his remarks intended that the inquiry and the possible taxation should apply to the increment of capital which had accrued during the War, however arising, or should apply only to the increment of capital which could be traced as arising out of the War. There is a great deal of difference between the two. It must be generally conceded that it would be exceedingly difficult, to put it at the lowest, to trace the origin of profits, as to whether they had arisen out of the War or not. You may take the case of some British subjects having business
in a neutral country, a country not indirectly even affected by the War. A profit arises in that country out of some factory owned by British subjects. It would be exceedingly difficult to say whether the profit made by that factory arose out of the War or did not. But suppose you take it on the basis of increment of capital during the War. A great deal of capital has changed hands. It would be exceedingly difficult. to trace, and some capital would accrue to individuals from causes of a fortuitous nature, such as the decease of relatives. Presumably that would come under review.
An example very frequently taken of what is thought by many to be an undeserved access of fortune is that connected with the owning of ships. I do not myself happen to be a shipowner except indirectly by being a director of a company, but I do know something of the position of a shipowner. I happen to know of the case of one snip that, belonged to a company with which I am acquainted. This was a steamer which cost, in pre,-war days, a little over £100,000. During the War she was taken by the Government, and happened to be torpedoed. After considerable delay and disputing as to the value—the value, I may say incidentally, being depreciated by the Government on the ground that she was a requisitioned ship and could earn only limited profits— the claim was settled at £180,000. The company were in this position, that they w ere deprived of a vessel that was earning profits. For three years they were unable to earn any profits on the vessel. They did not get their money from the Government for over two years, and now they have to build another steamer to replace that which was lost, having meantime lost the connection of a certain portion of their trade, and they have to pay £350,000 to replace the steamer which cost £100,000. That is not a singular case, and it must be remembered, therefore, when considering the profits which have come fortuitously to the shipowners, but there is another side to the case. In dealing with this question, the House will do well to remember that war profits have contributed to a very large extent to the revenue of the country. The Excess Profits Tax, which, as the House knows, is a tax on profits practically arising from the War, brought into the Exchequer something like £1,000,000,000, our National Debt being £8,000,000,000.
As regards the inquiry into this subject 0f the increase of the capital value of property, I personally have no objection to the inquiry being held. I think the suggestion impracticable, but I think it very desirable that the ghost should be laid, because at the present time with all this talk there is undoubtedly a feeling of uncertainty engendered in the mind of people who are thinking of venturing on commercial and industrial enterprises. A feeling of uncertainty is always the worst feeling you can have in a business community. It prevents people from making that. use of capital to which it is to the great benefit of the country that it should be put, and consequently if there is to be an inquiry let that inquiry be prompt and let the Report of the. Committee who are going to sit upon this Treasury White Paper be made at as early a date as possible.
I am one of those who recognised always that the burden of the cost of this War must, in the main, fall upon the wealthy classes of the community. But we ought to take care that in dealing with this burden and placing it upon those who have the wealth', and can therefore best bear a large portion of it, we do not unnecessarily affect the credit of individuals and commercial and industrial concerns either at home or abroad. In my judgment, an increase of Income Tax would less injuriously affect credit. It is my definite opinion—and I have met with many business people and discussed this matter with them—that the business world would vastly prefer a very heavy Income Tax for a. period than this Capital Levy or this levy upon increased wealth, chiefly owing to the effect that it would have upon credit. While we may feel confidence in the ability of our country to meet all the burden which faces it., it seems to me essential that we should keep the words "thrift" and "economy" before us, both in regard to our private expenditure and to the public expenditure. If we can keep those words well before us, I have no doubt whatever but that the brains, the energy, the business ability and the industrial ability of our people of all grades and of all ranks in industry and commerce will bring this country out successfully, and that in the end we shall meet all that faces us without any great difficulty and without seriously injuring our position as compared with our competitors in the world.

Mr. TREVELYAN THOMSON: I wish to support the Amendment. I do so because, notwithstanding the glowing speech of the Premier, I am still convinced that unless some such measures as are outlined in the Amendment are taken it will be impossible to realise the programme of social reconstruction which was set before the country at the Election and upon which this House has already spent a considerable amount of time. We were told, I believe rightly, that the War we entered upon was a war to end war. Faith in that inspired many of us in the dark days overseas, when we felt that no matter what horror and tragedy we were undergoing it was really the last time such a calamity would befall the world. It was in that hope and with that inspiration that we bore our lot as we did. Many of us vowed that if God spared us to come back, no stone would be left unturned on our part which would make it in very truth the last of all wars. Therefore, I welcome with all my heart this Amendment. The amount of armament expenditure we are facing is deplorable in a year when war is supposed to be banished from our land. The Prime Minister claimed credit because we had been one of the leading nations to establish the League of Nations and to have abolished conscription in Germany. That claim would have been better founded if we had set the example at home of reducing very considerably our armament expenditure below that of the pre-war period. It is deplorable that both the Secretary of State for War and the Prime Minister should take credit for a war expenditure which is considerably higher than that of prewar times. Therefore, I hope the House may be guided by the high idealism set forth by the Noble Lord (Lord R. Cecil) rather than by the gross materialism which characterised the speech of the Member for South Hackney (Mr. Bottomley). Until we can achieve an idealism which has the faith of practice and a belief in the League of Nations, I am afraid that the programme of social reconstruction to which this House has set its hand cannot be realised. You cannot have great armaments or big expenditure on wasteful and destructive means and social reform at the same time. Therefore I hope that the measure of support given to the Amendment. will show the Government that the House is not satisfied with the reductions they have made, great as they are, and that if our faith in the League of Nations
is to be a reality and not a platitude we must make great reductions in our armaments in the coming year.
Reference has been made to the White Paper submitted by the Chancellor of the Exchequer. I would support the contention put forward that in the normal year—it is perhaps more correctly called a mythical year—adequate provision is not made for the programme of social reconstruction. In the earlier months of this year the House occupied itself in passing the Housing Bill and the Ministry of Health Bill. If they are to be carried out in the spirit which was foreshadowed at the General Election, they will mean an infinitely bigger draw on expenditure than is provided for in the White Paper. No doubt the Chancellor of the Exchequer was anxious to have a normal or mythical year which should approximately balance, but to get that balance he has underrated considerably the cost of the housing scheme, if it is to be an adequate scheme and one worthy of the sacrifices that the country and its men have made. Those of us who have had experience of the cost of building which is being imposed upon local authorities know that the estimates have been falsified and that the tenders and actual cost of that building are infinitely greater than was ever intended. The country is pledged by the Housing Act, if we are to have anything like 1,000,000 houses, to a total expenditure, some of it reproductive of over £300,000,000. I would say in reply to those who from the opposite Bench have suggested we must cut our coat according to our cloth, that it is not that we cannot afford to have houses and health but that we cannot afford not to have them. The real health and wealth of the country are dependent upon these houses and upon the Government carrying out in a broad measure all the promises they gave at the last Election and the possibilities which are foreshadowed in the Bills we have already passed. Therefore I submit that if we are to have a real programme of social reconstruction we cannot regard it, as one hon. Member opposite has suggested, merely as a hobby. The questions of housing, health and education may be hobbies to the diletantte who sits on the local authority, but they are the real life and well-being of the people. Children are dependent upon education for their life and well-being when they grow up to manhood. Houses are to the workmen
what capital is to the employer, and unless the workman has healthy surroundings and the possibility of development in decent conditions he is handicapped in the life which is to come. I want to see this programme carried out not in any niggardly spirit, and I want us to realise that the wealth of the nation is not a question of pounds, shillings and pence, and not merely a question of stocks and machinery, but, as Ruskin said years ago:
The real wealth of the nation is the number of fully breathed, bright-eyed, happy-hearted children that it can produce.
Believing that wealth is to be measured by their well-being rather than by the amount of the capitalists' profit or the bankers' returns, I support most sincerely the Amendment. We must see armament expenditure reduced within rigid limits, and we must see the homes of the people made worthy of them. A great deal has been said about the rightness or wrongness of the conscription of capital. This House, rightly or wrongly, conscripted the manhood of the nation. The House said to the widow, "Your son must go and possibly make the ultimate sacrifice." The House having done that, how it can refuse to conscript the wealth of the country and can fail to make life worth living, I fail to see. Therefore I sincerely hope that the measure of support given to this Amendment will show to the Government that they are prepared to go to any expenditure to redeem promises that were made.

Mr. HODGE: There is no one in this House who has a greater appreciation of the genius of the Prime Minister than my colleagues on this bench, but it appeared to me that he was rather unfair to us. There can be little doubt that the Prime Minister gave of his best to his country in a time of need, but the Prime Minister gave no more than any of my colleagues or myself gave, for we gave of our best. His cheap sneer about direct action was, to my mind, unfair and uncalled for. I am unaware of a single individual associated with me on these benches who was a votary of direct action during the War, or is a votary of it now.

Mr. BONAR LAW: You misunderstood.

Mr. HODGE: I do not think I misunderstood. The Prime Minister has been likened to a Welsh wizard. I think he is an illusionist. He reminds me of Glasgow Fair, of which the Leader of the House
knows something. The illusionist says: "There is the object, keep your eye on it, and remember that the glibness of the tongue deceives the eye." And the thing is done. I think we have a great deal of that illusion as far as the Prime Minister is concerned. His gay wisdom and his banter very often succeed in obscuring the issue that is before the House. I dare say that there is hardly a Member of the House who has not on previous occasions enjoyed the magnetism and the hypnotism of the Prime Minister as far as this House is concerned. He requires only to appear and his obedient followers come to heel.
The Amendment that has been put forward by the Labour party was not proposed for the purpose of embarrassing the country. We look forward to the future with a certain amount of fear. I was an optimist all through the War; even on the blackest day I declared that we could not be beaten, that the British character was like that of the British bulldog—once it got its teeth in it never let go. It was death or victory. I want to see us victorious in peace as we were victorious in war. But what do we find to-day? We find that there is a great deal of unemployment. We find that the Government in the next few months will be dismissing thousands of men from the Government dockyards as well as from the Arsenal. In the Returns of the Board of Trade for 29th October they gave 9,300 odd agricultural labourers as being idle, and yet we have German prisoners working on the land. That is not fair. The first consideration surely should be to find employment for our own unemployed. That is a very much better proposition than paying unemployed benefit. It would be surely better to keep the German prisoners idle than to keep our own kith and kin idle.

An HON. MEMBER: Where are Germans working on the land?

Mr. HODGE: In Essex. I was down there three weeks ago, and saw at least 100 of them on three farms working and being paid for working just as they were three months ago. I am stating a fact, whether hon. Gentlemen like it or not. I saw the thing with my own eyes. I have the information here as to the number of idle men in the answer to a question put only today. I am sorry, for on reading the answer I find that I have made a mistake. The answer states that the total number
of German prisoners engaged in agriculture on 29th October was, as nearly as can be ascertained, 9,325. Therefore my personal vision is corroborated by the Board of Agriculture in an answer given to a question to-day.

Sir J. D. REES: The employers of these men invariably pay the full local rate for their labour.

Mr. HODGE: I cannot understand the sense of the interruption. I am prepared to say this, that up to now I do not believe that any other second Ministry would have done better than the present Government has done. But the difficulty is for the future. Certain employers are asking for reductions in wages. In my own industry, the iron and steel trades, when the employers are in a difficulty, just as in all other industries, the only thing they can think of is tampering with wages. During the whole period of the War—and I say this without contradiction—there was no industry in this country that had less friction than the iron and steel trade. There were no strikes. Every man did his best. Why? Because from time immemorial wages have been regulated by a sliding scale based on the latest ascertaimed selling price. To-day, at a great national conference, they come forward and seek to tamper with that which has existed for probably seventy years and has kept the trade free from the disputes and stoppages that have been so prevalent in all other industries. In the engineering trade recently we had the employers combating the men's claim for an advance with a proposal for a reduction. Why is it that the employers are coining forward in this way seeking to tamper with wages? Because of the high cost of raw material and their inability to compete with other countries in the neutral markets of the world. They think that by tampering with wages they are going to help themselves. That is futile. My belief is that by a Capital Levy, reducing the National Debt and halving the Income Tax, you are going to help industry, to cheapen prices, and to restore confidence. There is not a single industry in this country, except my own in certain instances, where the increases of wages have kept pace with the increased cost of living. That is the cause of the trouble in the engineering trade. It is the cause of the trouble with the iron founders, who claim that their wage increases—in other words, their war
bonuses—are nothing like equal to the increased cost of living. According to the Board of Trade Returns, the cost of living is still going up, and so long as that continues you are going to have unrest.
When the Labour party first proposed this levy on capital I was opposed to it. I thought, like my right hon. Friend (Sir A. Williamson), that it would be a tax on trade. But is there a single tax the Government has ever imposed that has not hit somebody hard or has not been a tax on trade? My right hon. Friend suggested an increase in the Income Tax instead of a Capital Levy. If that increase of Income Tax is going to be used for the purpose of reducing the National Debt it will serve exactly the same object, although in a different way. I look at the matter from a personal point of view. If I were the happy possessor of £3,000 it would be far better for me to part with £100 or £200 than have to pay an Income Tax of 6s. 8d. in the £, because if the Income Tax were reduced in the course of four or five years I would probably be better off than by paying a high Income Tax for the remaining years of my life. I do not think it can be disputed that if we get rid of the Bradbury's and of the greater portion of the present National Debt, commodities will cheapen, and it will make the task of the Chancellor of the Exchequer a very much easier one than is the case presently. On the question of currency inflation, I do not pose as a financial expert, but I do profess to be a lover of my country, and I have a desire to see labour going on with that success which it achieved during the War. Many of my Friends on this Front Bench not only gave of their best so far as labour goes, but they also gave their sons, and the bones of sons of some of them lie in France to-day. They are as keenly anxious for the future as any member of the Government can possibly be. We want to get that great burden of debt taken from our shoulders, and I believe it is only by doing so that the trade and industry of this country can get back to the position they formerly occupied.
Capital is afraid. From remarks which have been made to me during the course of the day, some of those interested in limited liability companies think a Capital Levy would mean the taking away of a great slice of their capital for
State purposes. But that is not at all the object of the Capital Levy. There is no idea of attacking aggregations of wealth in that way. The money individuals have in such companies would be reckoned as part of the individual's capital, and a tax would be placed on the individual, the incidence being the same as in the case of the Income Tax. I hope that statement will dissipate the fears of any of my friends who are interested in these great limited companies, although in the case of a good many of them, even if the Government did step in and take away a million or two, I do not know there would be anything very wrong. I find, as the result of returns I have had prepared —and I know more about my own trade than of other people's trades—in my own particular trade an immense amount of money has been made out of the War. In addition to that, the Ministry of Munitions has found money to enable them to put down new plant, the result being that the companies have been able to distribute huge sums by way of bonus shares. Let me take as an example a company in which I believe the Secretary to the Treasury is interested—Baldwins Limited—which last year made a distribution of one share for each four held, this being equal to a 25 per cent. dividend. There are a great many other firms that have done equally well. All this has been made out of war profits. To my mind, no one should have a right to make any extra money out of the War. Our sons and brothers have given life itself to their country. No one could do more than that. Many of us were too old to fight, but we boasted that we were not too old to pay. Now our chance has come to pay.
10.0 P.M.
The Prime Minister talked about the £120,000,000 per annum which was going to be paid in pensions. I find according to some of the professors, who are useful people in many respects, that statisticians have calculated that out of the £400,000,000 per annum that will have to be paid in interest people above forty-five years of age will take at least £325,000,000, while those who have suffered in life and limb and health will only get £120,000,000 a year. I do not think there is one of us who will say that anything the disabled get is too much, but at the same time we have got to look at the other side of the picture, that they were fighting for the protection of that money so far as those people were
concerned, and had it not been for their sacrifice they would have had nothing left. I also find, in speaking with prominent men in all industries, that while they hated the mention of a Capital Levy to begin with, to-day they have come to realise that there is something in it and that it would be better to wipe off a large portion of that huge debt than to have to continue paying the huge Income Tax that is presently bearing us under, because it is a heavy tax upon industry. The Government have recently been preaching economy. I am not an economist, if economy means that we are going to prevent reconstruction. The Prime Minister has said that England must be made a place fit for heroes to live in. You cannot do it by practising economy, unless it be economy so far as ordinary expenditure is concerned; but so far as the reconstruction necessary for making England a place fit for heroes to live in is concerned, it is essential that more money should be found. The Chancellor of the Exchequer, however, cannot find that money unless he get the millstone of his £400,000,000 of interest annually cast from his neck. Hence the reason why something drastic should be done so far as that huge debt is concerned. But all Governments are the slaves of precedent. There is no precedent for them to go on, and hence anything that is new is met by that old cry, "It cannot be done." I have listened in this House to Chancellors of the Exchequer who, when they were asked to indulge in a greater graduation of Income Tax, said that it was so troublesome and complicated that it could not be done. It has been done, and there is not any reason why a Capital Levy should not be imposed, except that stubbornness from which we all suffer at times, and were it not for that stubbornness I think the Chancellor of the Ex-chequer might see in the proposal that has been put before him a method whereby his task would be lightened. Take the question of old age pensions. To-day, as a result of the depreciation of money, the 7s. 6d. that these old people have is. worth probably about 2s. 8d. A Committee is reporting, and they will undoubtedly report in favour of a large increase. Where are you going to get that money from unless you adopt the method that we suggest? And in the same way there are all those problems of reconstruction which undoubtedly cannot be met unless by an
increased revenue. I do not ask for a committee of inquiry, because I am satisfied that, so far as the Treasury is concerned, more particularly its Inland Revenue Department, they have all the ability and the experience necessary to place before the Chancellor of the Exchequer a scheme perfect in every respect. May I, in conclusion, reiterate that I look forward, as do my colleagues, with some dread to the coming winter. Dismissals at the dockyards, dismissals at the Arsenal, the great difficulty in finding employment for the thousands of men who have been demobilised, the thousands of women who have been in industry and who arc now being turned off from industry, will undoubtedly have the effect of creating a great deal of unrest, which will be seriously affected and aggravated by the proposal of the Government that unemployment pay, notwithstanding all its evils, shall shortly cease. I, therefore, ask that the Leader of the House should indicate before anything is done in that direction that the problem will be very seriously considered by the Government, as I feel convinced that when all the facts are taken into consideration—and the Ministry of Labour have the statistics before them—they will see the impossibility, once having done that, of staying their hand, more particularly at a time when they are simply settling down after the horrors of war. May I beseech the Leader of the House seriously to consider once again the problems which we have placed before him and the methods whereby we think the difficulties of the financial situation and of the industrial situation may be solved?

Mr. BON AR LAW: There are two remarks, which I wish to make at the outset, on the speech of my right hon. Friend, to which I have listened, as always, with a great deal of interest. The first is, that I was agreeably surprised to listen to a statement from him which is as strong a vote of confidence as it is possible for any Member of this House to give. He told us that he was satisfied that up till to-day—I do not wish to go any further—no Government could have done so well, or could have done better than that which now occupies these benches. His whole speech was a most interesting commentary on one part of the speech of my right hon. Friend the Prime Minister. He described an ideal Cabinet to take our places, and indicated
a few of the difficulties of this question of retrenchment with which they would be faced. He was sanguine enough to think they would last long enough to enable my right hon. Friend to accept the principle of "Peace, etc." —[HON. MEMBERS: "Why not go on?"] I thought you would remember the rest. I do not think I ever rose with less inclination to make a speech than I feel at this moment. When it was arranged two days ago that I should speak at the end of the Debate I felt quite happy, because that always means you have sufficient material to answer to enable you not to bother much about a speech. The worst of this Debate is that there is nothing I have heard which is in the least degree relevant to the subject to be answered. I am left, therefore, in considerable difficulty. The only hope I have—and it is not a very strong hope—of imparting any novelty into the discussion is that I may endeavour to some extent at least, to talk about the subject of finance.
My right hon. Friend the Chancellor of the Exchequer was attacked outside, and —in the case of those who did not revise their speeches—inside, because of something he had said in August as compared with what he said yesterday. Well, I do not wish to be disrespectful to my right hon. Friend, but the House will remember that he is Chancellor of the Exchequer. He—I was going to say more—but certainly as much as any member of the Government was anxious to see that no public money was spent, the spending of which could be avoided. With the laudable desire of making the occasion of speaking in this House an opportunity to emphasise that lesson, he uttered—if he will forgive me for saying so—an obvious commentary which is the cause of all these alarms. He said if we go on indefinitely spending at the rate we do to-day we shall end in bankruptcy. Does anyone doubt it? As I understand, the criticism of that is that my right hon. Friend should have found some more ingenious and less commonplace way of enforcing the lesson that money should not be wasted. In addition to that, the conditions have changed since August. They have largely changed, and I venture to make this claim on behalf of the Government, that though part of the change is due to improved conditions for which we are not responsible, part of it is due to very definite and vigorous action
on the part of the Government as a whole, and of the Finance Committee to which my right bon. Friend referred.
Another charge made against my right hon. Friend was that he was so disgracefully out in his estimates. Chancellors of the Exchequer in the old days used to be able, not by their own skill, but by that of their officials, to give very accurate estimates, but every Chancellor of the Exchequer who has spoken during the War said, in introducing his Budget, that, in such conditions as prevailed, an estimate could not be more than a guess. If that were true during the War, it is equally true this year, which is really as much part of the War for this purpose as any of the years that have gone before. But, having said that, may I remind anyone who still thinks he has a rod in pickle for my right hon. Friend that, as a matter of fact, even with the revised Estimates of what the expenditure is going to be, my right hon. Friend has a smaller percentage of error than the Budget Estimates of any Chancellor of the Exchequer since the War began. In addition to that, the tot31 error in the Estimate is £223,000,000. [HON. MEMBERS: "Nothing" and "A bagatelle ‡"] I think I have said enough to show that it is not a great crime to make that error, judging by the performance of others, including myself. But of that error, a very large sum is riot money which will not be received, but is money the payment of which is simply being postponed. Some millions at least of it are due from the Australian Government, not for payment of loan, but for payment for Australian troops on the Continent. The exact date of such payment was always uncertain. It is postponed, but it is as certain that we shall receive it as pay our own debt. In addition to that, there is £65,000,000 which represents the stock-in-trade of the Food Department. At the time the Budget Estimate was made, it was believed that that Department could be brought to a close during the current year, but we decided it should not be brought to an end. There is stock-in-trade still. It will come into effect when the goods are sold. And does anyone really contend that in making a balance-sheet, which is to represent what are the facts, you are simply to treat the money as gone into the air, and not to be considered by the Government as an asset at all?
There is also a sum, put down at £69,000,000, as money to be received from Germany for the Army of Occupation. My right lion Friend told us that everybody in Paris knew that we could not. get it this year. I wonder where people get their information? I was in Paris at that time, and took a considerable part in the terms of the reparation payments from Germany. This is the first charge upon Germany. At that time I certainly thought we should be able to get it during the present financial year. Whatever we may think about the amount otherwise to be obtained from Germany, there is not any-(me in the House who doubts that, as far as this first instalment is concerned, that at least is forthcoming. There is an expenditure which would appear to any business man as a book-keeping entry which could not be regarded as anything lost.
Let me deal with another aspect of the question. All this, which I described the other day as clatter, is due simply to forgetting the fact, to which the Prime Minister has referred, of there having been a war. It is due to the assumption that this is a year of peace, and that we should not have any expenditure which was not made out of revenue. I am not going simply to repeat what has been said by my colleagues, but any idea more absurd than that it is impossible for the mind of man to conceive. I really listened with amazement—if my right hon. Friend opposite will allow me to say so—at the suggestion seriously put forward by him that the moment the Chancellor of the Exchequer discovered that there was to be this £500,000,000 deficit he should have called the House of Commons together, had a new Budget, and put on this £500,000,000 in extra taxation. Did anyone ever hear of such a suggestion? Does it mean put on this £500,000,000 to meet the expenditure of this year presumably with the idea of taking it off in March when we find it is no longer necessary?

Sir D. MACLEAN: Is the right hon. Gentleman referring to me?

Mr. BONAR LAW: Yes.

Sir D. MACLEAN: I have no recollection of making that suggestion.

Mr. BONAR LAW: My right hon. Friend's recollection ought to be better than mine. I heard his speech; I think he
said it. Perhaps if he reads it again he will think I have some excuse for what I say.

Sir D. MACLEAN: No; and I think the eight hon. Gentleman should withdraw.

Mr. BONAR LAW: I withdraw at once. I accept my right hon. Friend's correction. Still, I would like him to read his speech again. Let sue put it in this way. Suppose—when we were listening to all this alarm—somebody had said, "Well, if at the end of this financial year, 31st March, 1920, the financial position of this country is not worse, and the debt is not greater than it was estimated to be on 31st March, 1919, in the last Budget made when the War was going on "—suppose one were to say that—would not the House and the country have thought that was a pretty good arrangement? What are the facts? The last Budget during the War was introduced by myself. I estimated then that on 31st March of this year the National Debt would be £7,980,000,000 gross. It is now £8,000,000,000. Is that really a matter for deep distress and despair on the part of the House of Commons and the country I My right hon. Friend the Prime Minister said so much about optimism that it would be absurd for me to repeat it. But I read an extract only this afternoon which shows the beauties of pessimism. Perhaps it is worth while reading to the House, as it is very short. It referred to the wars of Marlborough, about which Swift—and he was no fool—says:
Six millions a year, and a debt of £50,000,000; the High Allies have been the ruin of us.
Come to a generation later, and this is about Chatham:
One hundred and fifty millions debt (said Junius)‡ Well may we say that we owe Lord Chatham more than we shall ever pay if we owe him such a load as this. Two hundred and forty millions debt, cried the statesmen of 1773 in chorus, what abilities or what economies on the part of any 'Ministry can ever save a country so burdened‡
If optimism can be carried to excess, so can pessimism. One of the most amazing things about this Debate inside the House and in the discussion outside was the supposed novelty of what the Chancellor of the Exchequer said. They said, "What an amazing speech; we were never prepared for such a situation as this ‡ "I am not paying my right hon. Friend a compliment, although he may object to the way I am putting these things, but he did not say anything in his speech as regards our
financial position which was not quite plain to any man of ordinary intelligence who read the White Paper. That is the exact position. The thing which surprised people most was the statement that if no additional expenditure were sanctioned there would be no need for additonal taxation. That is perfectly evident from the White Paper. All through the War every Chancellor of the Exchequer framed his Budget on this principle, that taxation would he heavier now to meet a normal year's expenditure when we return to times of peace. In the discussion on that Budget it was over and over again said to me, "But you know there are some of these things you will not get back in the year the War ends. The Allies will not be able to pay their debts." The reply was this: "If there is after-war expenditure of that kind, there will also be after-war receipts which it is perfectly right and proper to set against that special expenditure due to the War."
If anyone will look at the White Paper they will find there assets just as good as any other assets in the shape of Votes of Credit and other assets which are worth over £425,000,000, and in addition there are arrears of Excess Profits Duty of £240,000,000. Is it not evident to anyone that even though the expenditure next year should he as high as it is to-day—not as high as the average for the whole year, and that is impossible, for the reductions we have already made in personnel make it impossible—even if it were during the whole of next year as high as it is to-day these exceptional receipts would more than meet that exceptional expenditure, and make it perfectly unnecessary to impose extra taxation for this special purpose. That was known to everyone, and I do nut understand where the novelty of the speech conies in.
Another point to which I wish to call the attention of the House is this: The charge which we expected to have to meet in addition to this financial position, for which we are as much responsible as we are for the weather, was the charge of extravagance in the spending of the money. I have not heard it and my right hon. Friend the Chancellor of the Exchequer perhaps prevented it by pointing out that if the whole of the staffs were reduced to the pre-war level and all the new offices were abolished, even then the total possible saving would be only £20,000,000, and as wages have gone up that saving is out of the question. That,
perhaps, takes away the desire to press this unduly, but I do not think it takes it away altogether. I say that I was long enough Chancellor of the Exchequer to feel that expenditure even in these comparatively small things is very important. While the War was going on I did try, whether successfully or not, to save money, but I tried then, as any business man would have done, to save in the big things. Neither I myself nor the Treasury staff would have been wise to have devoted our time to small economies when there were hundreds of millions which we believed might be saved by taking the best methods of getting cheap production. We centred on that. But the moment you come to peace times the position is different, and the whole principle on which the government of the country is carried on depends upon the strictest economy in every particular. It is not merely a question of the amount saved; it is a question also of setting an example to the whole of the country.
I do not want—and this is the difficulty of this kind of discussion—to give the impression that this is a matter of no importance. I do not wish to do anything of the kind. But I say that I am perfectly certain that never in the history of this country has so great an effort been made, not merely by the Chancellor of the Exchequer, but also by colleagues who are associated with him in the Finance Committee in cutting down that kind of expenditure. We may not have succeeded to the greatest extent that we might, but let me give an example of the sort of thing that has been done. There were a great many questions asked about Ministers' motor cars. I can speak quite dispassionately about this, because, living in Downing Street, it would have been absurd for me to have had one, and it did not therefore affect me. I honestly believe, in view of the difficulty still of getting taxi's and other convenient means of locomotion, that it is not an economy to take away these motor cars from Ministers, but I reconunended it, and it was done for the sake of the example that it gave. We knew that we could not expect to get the officials to do everything in their power until we had shown them that Ministers were prepared to set the example. I say that we have done everything that we could in that direction—I do not mean in that particular direction—to cut down expenditure in this way.
I would like now to look at the exact financial position in which we stand. We are left with a debt which at the end of this year will be £8,000,000,000. It is an appalling figure, but let us try to consider it as we would examine the accounts of a business firm. Do not let us make it better or worse than it is. The gross debt is £8,000,000,000. Against that we have debt due to us by our Allies of over £1,700,000,000. We have a debt of £842,000,000 due to America. I suppose, to put it very favourably from the point of view of the creditor of the firm and very unfavourably for the firm itself, if a competent accountant were examining that he would say that the £842,000,000 due to the American Government is at least set off by the £1,700,000,000 due by our Allies. Let. me make that perfectly plain. Apart altogether from Russia, the amount due by Italy and France exceeds our debt to America. Well, these countries are not going to fail to redeem their debt. And, as regards Russia, does anyone think that is for ever a bad debt? If they do, I do not. Russia is a great Empire with greater natural resources than any other country in Europe, and whether they ultimately settle clown to a United Russia or a divided Russia, whatever Government is there, we know that these natural resources can only be developed by foreign capital, and that they will never get foreign capital except by first. saying that they are willing to pay their debts. I find on making inquiry that Russian bonds are being dealt with in small quantities in the City of London to-day at something like 40 per cent. I do not think I am putting it very highly in saying that the debt due to America can be set off by those debts. Let me give another reason for that.
With regard to our Allies we do not want to be hard on them, and though certainly I am not making any claim upon America—that is the last thing I would do—what I do say is this, if under motives not of finance but motives considering the sacrifices we made in the War, that kind of consideration is to come in, it ought not to have the result of not receiving what was due to us and paying what we owe to others. Therefore I say we arc entitled to wipe off that amount. That means you take off £842,000,000,000. in addition to that the Dominions owe us £200,000,000, and that debt is as good as our own credit. India owes us
£221,000,000. Putting it in the way I put it that means reduction of our gross total, which brings the debt down to £7,000,000,000. That is not the end of it. You cannot of course count things twice. I have counted the assets available to us as going to meet next year's extra expenditure, and I do not believe that they will anything like all be required for that purpose. I am satisfied there will be a very considerable surplus, and if so it goes to the further diminution of the debt.
Let me say something about another matter. In this House, as my hon. Friends know, I have had more than once to make speeches about the German indemnity which did not give satisfaction to them. Even during the elections I was very guarded in what I said. I did not believe it within the bounds of possibility that anything like the total debt could be got out of Germany, and nothing like that was said by any of my colleagues. This does not mean that we are not going to get something. The very fact that we took a reasonable view as to the amount we might get will make us take an equally reasonable and firm attitude in getting what we can get. But I say this to the House of Commons that unless Germany goes and remains bankrupt, justice, reason, and commonsense demand that the sacrifice should be greater on her part. I at least am satisfied that it will make a considerable sum, and that we shall reduce a considerable amount of our debt from that source. I am not only convinced of it, but of this that this Government, just because it took a reasonable view as to the proper amount, will leave no stone unturned to get every pearly we really can. That brings the total amount of debt down very much.
This leads me to the special subject which has been talked about to-day; and that is the question of a Capital Levy. The House will, I am sure, remember that this is a subject which I approach with some delicacy. While I was Chancellor of the Exchequer it gave me a great deal of trouble, and I think the trouble it gave me has been a lesson to the House and the country now. I would like to say this also to the House and to some who are not in the House now, that I was very grateful not only to the Members of my own party but to hon. Members of other parties who were much opposed to us, because they realised that as long as I
was Chancellor of the Exchequer the shaking of confidence by talk of that kind was so serious that even when Debates took place upon it they refrained from dragging me into it because of the effect it would have upon our credit. I think there is a lesson to be drawn. I am glad now to be able to speak quite freely about it, for we are no longer at war, although that does not matter, because I am equally responsible though I am no longer Chancellor of the Exchequer. I looked up to-day what I actually said, and anything more innocent in every sense of the word I never read. This is what I said. "The question whether or not this big debt should be paid by a levy on existing wealth or by high taxation spread over a great many years is a question of what is best in the interests of the country," and I added, "I do not say it is impossible but it cannot be done now." In addition to that I said, "This is not a question for the working classes at all." What we have found during the War is that the war expenditure is really paid by the classes which have accumulated wealth. Before the War the proportion of direct taxation was something like 55 per cent to 45 per cent. Last year the proportion of indirect taxation which by any possibility could fall upon the poorer classes was only 28 per cent., and the rest was paid by direct taxation. I said, therefore, "this is a question not between the classes but one which ought to be decided by the class which has got to pay. It is simply a question with them with which sauce do you prefer to be eaten." That was the position then. I ask the House to remember that at the time I spoke the War was still going on. I did not know how long it would last. I did not know how great the burden might ultimately be, and I say now that anyone who looked to the possibility of another two years, perhaps, of war, and did not recognise that some sort of expedient of that kind might be an absolute necessity was not a man of principle, but a man without common sense. The position now is different. We have got to judge it by certain known facts. It is rather curious, on the whole, that I should have got into that particular kind of trouble. It was due, of course, to what was meant to be a private talk being made public. I read in some newspaper the other day that what was needed in the matter of
finance was a man of imagination and expedients. I do not know what is meant by imagination.

An HON. MEMBER: The Prime Minister has it.

Mr. BONAR LAW: I hope he is not the only one. If my hon. Friend implies that I have not, I do not agree with him. In a real sense no intellect is possible without imagination. But what in that sort of sense is meant by imagination and expedients is someone who is hunting about for something novel. I do not believe in that kind of imagination.
A great Scottish writer once said it is proverbial that a man of logic cannot prosper. He is a wordmonger whom all business people avoid. I believe that is true. As regards finance, there is not room for much in the way of expedient. As the right hon. Member for Hitchin (Lord R. Cecil) said, in reality it all comes out of one pool. What is required in the man at the head of our finances is commonsense, wisdom, caution and, when he has made up his mind, courage. Those are the qualities that are wanted and I think my right hon. Friend—and this should compensate for the other things—has them. I am not going to say that I do not agree to-day with absolutely every word that I then said. If I think it is possible to get over our difficulties in the old way I would infinitely prefer it. It is only necessity that would make me try another.
There has been a suggestion that to relieve our burden we should make a special levy on war profits. That is not a novel idea. When I was still at the Exchequer we thought of it and discussed it, and for that reason I perhaps realise the difficulties more than those who talk of it without thinking. I am almost afraid to dwell upon the difficulties, because it might seem that I am against it. I am not; I am in favour of having it examined. There is a great deal to be said for it on the grounds of justice. When Mr. McKenna was introducing his first Excess Profits Duty he actually passed a Resolution through this House which would have put an Excess Profits Tax on the sale of any commodities which were yielding a profit. That was not carried, because there was a difficulty, and die was so glad to get the principle adopted that he did not press it. When I was still at the Exchequer I was told that there were attempts being made deliberately to avoid
Excess Profits Duties. For instance a man might see that his firm was going to make an immense profit next year and he would sell it to another company in which he perhaps had a majority of shares. I had that looked into and I was told that it did not extend very far. That kind of thing, if it was done at all, is something which everyone would like to tax if they had it in their power.
The difficulties of this question really are very great. The difficulty is to decide on what is due to the War and what has arisen during the War. I am almost afraid to point out the difficulties, but let me point out one. Are you going to assess the value of property a man has? If so, look at the effect upon any manufacturing business. Take machinery today and compare it with the price at which it could be replaced to-day and the price at which it could be replaced before the War. Obviously the difference is so great that if you took away that you would make most of these firms bankrupt. I only say that to show that there are great difficulties in the way. But we ought to have the question examined, not for the purpose of shelving it. Let me make it quite plain that the reason my right hon. Friend proposes to appoint a Select Committee for this purpose and not to extend the inquiry is in order to get it done quickly. Nothing is more important than that it should be known as soon as possible exactly what is going to be done in regard to that kind of thing. That is a good reason, in my opinion, for not exceeding the scope of the inquiry. We want to get this point to a head. Let us know where we stand. The two considerations which would influence one in opposing it and not opposing it are there. If it is going to disturb credit and the amount you will get out of it is small, it is not worth while in those circumstances. But I hope it may be otherwise. The principle is a fair one, and I should be glad if examination shows that it can be practically carried out.
Does not what I have said bear directly on the question of Capital Levy? If you ever have a system of Socialism, which is conceivable but which I do not think will exist until human beings have become angels, then you can do without credit, but it is my firm conviction that as long as the present system exists what is more important especially to a country like this by far than getting even
£1,000,000,000 off your debt is not to give capital, on which the life of the country depends, the belief that it is unsafe. It has always been my view, and that is the reason, in my opinion, against the Government formally saying, "We will have an inquiry," for fear it might think that we were addressing our own minds to it. That is the reason, in my opinion, for not having this Government inquiry into that.
Let me try to bring what I have got to say to a close by reference to what I believe to be our actual position. I do not think that I am unduly optimistic—nobody ever blamed me for that in private—for thinking as I do that there is not the slightest doubt that unless some catastrophe happen, a catastrophe of our relations at home, or something of that kind, we shall pull through this storm, and pull through it with a considerable amount of prosperity. But I would like to emphasise, and I do it, though it was done so completely by the Prime Minister, because I represent another party in this country, and I agree entirely with him—he amazes me sometimes by the way in which he hits the nail on the head unexpectedly. He said to-day that fear is the cause of all our trouble, because there is no reason in it. Nothing was ever said that was truer. What was the cause of a great deal of the cruelty that is found in the French Revolution, and is found among the Bolsheviks to-day? It is because, I believe, that they know that their own lives are at stake and they do not know what to do. I trust we shall never get into that frame of mind. Nothing could be worse.
Do not let us imagine because we have got to cut down expenditure in every direction therefore the nation cannot spend the money that is needed to improve the life of the nation. We could not make a greater mistake. I always come back to the old business analogy. If a business finds its credit is rather restricted, as often happens, and it is difficult to get along, and they say, "We will pull in our horns in every direction," then in nine cases out of ten it goes into bankruptcy. But if they say, "We are solvent and doing a good business, we will use every ounce of credit we can get and pull through," it is better off than ever. It is the same with us. Do not we imagine—I am speaking my deep conviction—that the world after the War, with all the turmoil that is seen in
every country in the world, is [...]g to go on in quite the old way It is not. Nothing can be worse for capital or for the whole life of the nation than to have the idea that you do not need to pay any attention to the condition of the people in this country. It is bad economy from that point of view alone.
I am not going to dwell on special subjects. My right hon. Friend the Prime Minister referred to an interesting speech delivered by my hon. Friend for Spring-burn Division of Glasgow (Mr. Macquisten). I cannot say anything more about it beyond that I agree with the Prime Minister, except., perhaps, that the speech gave me great pleasure to listen to and that I think it was useful because it taught the House as a whole a lesson that is not fully realised, that the one nationality in these Islands with any real sense of humour is the Scottish. I am not going to speak about the special subjects, but there is one to which I will refer as it was mentioned by the last speaker—that is, the unemployment dole. If there be anything which by my whole instinct I hate, it is that kind of thing. But I ask the House to put itself back into the frame of mind which existed at the time that dole was given. I know about it. The Prime Minister was in Paris, and I had very considerable anxiety about the industrial position at that time. 1 say to the House of Commons that, in my belief, if we had attempted then to send away all those people who had been working for the Government, with the risk of their being left on the streets with nothing to live upon, we might have been faced—I do not like the word revolution, but I do say that we would have bave certainly faced with strikes all over the country which would have cost us millions more than the amount of the unemployment dole. We have to take all that into consideration when we are dealing with it.
This Debate has been very useful. There is one point I would like to put to the House. If we really are the wastrels we have been accused of being, I can assure them it is not from vice and not from incompetence. There is no doubt about that. We are as anxious not to do it as any Member of the House. In judging whether or not we are so bad, you have to take into account how we have dealt with other things. If we have not been perfectly incompetent in regard to them. I think we may assume that we are
moderately competent in regard to this subject. I am not like my right hon. Friend the President of the Council (Mr. Balfour)—I read the newspapers. I have been reading to-day certain newspapers, and I was reminded of an incident recorded in the Bible. There was a certain King of the Moabites named Balak, who sent to a wise man, whom, for the sake of my parable, I shall liken to the House of Commons. He sent to a wise man named Balaam, and said, "Come and curse the Israelites." Balaam with proper persuasion was induced to come, but when the time came for him to speak he was like George Washington—he could not tell a lie. He said, "I find no iniquity in Jacob and no perverseness in Israel." This was rather hard on the King of Moab. He thought it was time to compromise. He said, "If you won't curse him, at least do not bless him." But he could not even get the compromise. Balaam was brought to curse and remained to bless. I ask the House of Commons to give us their blessing now. We need it, and, on the whole, as Governments go, I almost think we deserve it.

Sir D. MACLEAN: May I ask your ruling, Mr. Speaker, upon a question I put to you at an earlier stage of the proceedings, as to the possibility of moving an Amendment to the Amendment which is now before the House? I should like to know whether it is competent for me to move that, however formally and briefly?

Mr. SPEAKER: I hope that when I was appealed to before, in what I said I did not mislead the House in any way. I am afraid I did not make myself very clear on that occasion. It is not competent to move an Amendment to an Amendment which has been moved, until the Amendment which has been moved becomes itself the substantive Motion. I will put the Question, "That the words proposed to be left out stand part." If that is negatived, then the Amendment of the right hon. Member for West Fife becomes the substantive Motion, and the suggested Amendment can be moved.

Mr. ADAMSON: rose in his place, and claimed to move, "That the Question be now put "; but Mr. Speaker withheld his assent, and declined then to put that Question.
Debate resumed.

Sir D. MACLEAN: I regret that that is the position, because it leaves me and some of my colleagues in what we regard as an unfortunate position in not being able to record our votes against the Government—

Mr. ADAMSON: rose in his place, and claimed to move, "That the Question be now put''; but Mr. Speaker withheld his assent, and declined then to put that Question.
Debate resumed.

D. MACLEAN: The suggested Amendment was that, preceding the demand for a Capital Levy, an inquiry should be held. That has been my position all the way through, and, under the circumstances, I much regret that I cannot go into the Lobby with my Labour Friends on this occasion.
Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 405; Noes, 50.

Division No. 119.]
AYES
[11.0 p.m.


Adair, Rear-Admiral
Casey, T. W.
Fisher, Rt. Hon. Herbert A. L.


Addison, Rt. Hon. Dr. Christopher
Cautley, Henry Strother
FitzRoy, Capt. Hon. Edward A.


Agg-Gardner, Sir James Tynte
Cayzer, Major H. R.
Flannery, Sir J. Fortescue


Amery, Lieut.-Colonel L. C. M. S.
Cecil, Rt. Hon. Evelyn (Aston Manor)
Forestier-Walker, L.


Archdale, Edward M.
Cecil, Rt. Hon. Lord H. (Oxford Univ.)
Forrest, W.


Armitage, Robert
Cecil, Rt. Hon. Lord R. (Hitchin)
Forster, Rt. Hon. H. W.


Ashley, Col. Wilfred W.
Chadwick, R. Burton
Foxcroft, Captain C.


Astbury, Lieut.-Corn. F. W.
Chamberlain, Rt. Hon. J. A. (Birm., W.)
Fraser, Major Sir Keith


Austin, Sir H.
Chamberlain, N. (Birm., Ladywood)
Gangs, E. S.


Bagley, Captain E. A.
Cheyne, Sir William Watson
Ganzoni, Captain F. C.


Baird, John Lawrence
Chilcell, Lieut.-Com. H. W. S.
Gardner, E. (Berks, Windsor)


Baldwin, Stanley
Child, Brig.-General Sir Hill
Geddes, Rt. Hon. Sir A. C. (Basingstoke)


Balfour, Rt. Hon. A. J. (City, London)
Churchill, Rt. Hon. Winston S.
Geddes, Rt. Hon. Sir E. (Cambridge)


Balfour, George (Hampstead)
Clay, Captain H. H. Spender
George, Rt. Hon. David Lloyd


Balfour, Sir Robert (Partick)
Coates, Major Sir Edward F.
Glbbs, Colonel George Abraham


Banbury, Rt. Hon. Sir Frederick
Coats, Sir Stuart
Gllbert, James Daniel


Banner, Sir J. S. Harmood
Cobb, Sir Cyril
Glmour, Lieut.-Colonel John


Barker, Major R.
Cockerill, Brig.-General G. K.
Glyn, Major R.


Barnett, Major Richard W.
Colfox, Major W.P.
Goff, Sir R. Park


Barnston, Major Harry
Colvin, Brig.-General R. B.
Grant, James Augustus


Barrand, A. R.
Conway, Sir W. Martin
Gray, Major E.


Barrie, Charles Coupar (Banff)
Cooper, Sir Richard Ashmole
Grayson, Lieut.-Col. H. M.


Beauchamp, Sir Edward
Coots, Colin R. (Isle of Ely)
Greame, Major P. Lloyd


Beck, Arthur Cecil
Cope, Major W. (Glamorgan)
Greene, Lt.-Col. W. (Hackney, N.)


Beckett, Hon. Gervase
Cory, Sir James Herbert (Cardiff)
Greenwood, Col. Sir Hamar


Bell, Lieut.-Col. W. C. H.(Divzes)
Courthope, Major George Loyd
Greer, Harry


Bennett, T. J.
Cowan, D. M. (Scottish University)
Gregory, Holman


Bentinck, Lt Col. Lord H. Cavendish
Craig, Captain Charles C. (Antrim)
Greig, Colonel James William


Bethel, Sir John Henry
Craig, Col. Sir James (Down, Mid.)
Grattan, Colonel John


Betterton, H. B.
Craik, Rt. Hon. Sir Henry
Griggs, Sir Peter


Bigland, Alfred
Curzon, Commander Viscount
Gritten, W. G. Howard


Billing, Noel Pemberton
Dalziel, Sir Davison (Brixton)
Guest, Maj. Hon. O. (Leic., Loughbero')


Birchall, Major J. D.
Dalziel, Rt. Hon. Sir J. H. (Kirk'dy)
Gulnness, Lt.-Col. Hon. W. 5.(8. St. E.)


Bird, Alfred
Davies, Alfred Thomas (Lincoln)
Gwynne, R. S.


Blades, Sir George R.
Davies, Major David (Montgomery Co.)
Hacking, Captain D. H.


Blair, Major Reginald
Davies, Sir D. S. (Denbigh)
Hailwood, A.


Blake, Sir Francis Douglas
Davies, Sir Joseph (Crewe)
Hall, Lieut.-Col. Sir Fred. (Dulwich)


Blane, T. A.
Davies, T. (Cirencester)
Hamilton, Major C. G, C. (Altrancham)


Barwick, Major G. O.
Davies, Sir W. Howell (Bristol, S.)
Hanna, G. B.


Boscawen, Sir Arthur Griffith.
Davison, Sir W. H. (Kensington)
Hanson, Sir Charles


Bowles, Colonel H. F.
Dean, Corn. P. T.
Harris, Sir H. P. (Paddington, S.)


Bowyer, Captain G. W. E.
Denison Pender, John C.
Haslam, Lewis


Boyd-Carpenter, Major A.
Dennis, J. W.
Henderson, Major V. L. (Tradeston)


Brassey, H. L. C.
Dewhurst, Lieut.-Com. H.
Hennessy, Major G.


Breese, Major C. E.
Dixon, Captain H.
Henry, Denis S. (Londonderry, S.)


Bridgemari, William Clive
Dockrell, Sir M.
Herbert, Col. Hon. A. (Yeovil)


Britton, G. B.
Doyle, N. Grattan
Herbert, Denniss (Hertford)


Broad, Thomas Tucker
Du Cros, Sir Arthur Philip
Hewart, Rt. Hon. Sir Gordon


Brown, Captain D. C. (Hexham)
Duncannon, Viscount
Hickman, Brig.-Gen. Thomas E.


Buckley, Lieutenant Colonel A.
Du Pre, Colonel W. B.
Hilder, Lieut.-Colonel F.


Bull, Rt. Hon. Sir W. J.
Edgar, Clifford
Hinds, John


Burdon, Col. Rowland
Edge, Captain William
Hoare, Lt.-Col. Sir Samuel J. G.


Burdett-Coutts, W. L.
Edwards, A. Clement (East Ham, S.)
Hohler, Gerald Fitzroy


Burgoyne, Lt. Col. Alan Hughes
Edwards, Major J. (Aberavon)
Hood, Joseph


Burn, Colonel C. R. (Torquay)
Edwards, J. H. (Glam., Neath)
Hope, Harry (Stirling)


Burn, T. H. (Belfast)
Elliot, Captain W. E. (Lanark)
Hope, James Fitzalan (Sheffield)


Butcher, Sir J. G.
Elliott, Lt.-Col. Sir G. (Islington, W.)
Hope, Lt.-Col. Sir J. (Midlothian)


Campion, Colonel W. R.
Falcon Captain M.
Hopkins, J. W. W.


Carew, Charles R. S. (Tiverton)
Falle. Major Sir Bertram Godfrey
Hopkinson, Austin (Moseley)


Carlile, Sir Edward Hildred
Farquharson, Major A. C.
Horne, Sir Robert (Hillheadj


Carr, W. T.
Fell, Sir Arthur
Houston, Robert Paterson


Carson, Rt. Hon. Sir Edward H.

Howard, Major S. G.


Hudson, R. M.
Moreing, Captain Algernon H.
Scott, Leslie (Liverpool, Exchange)


Hughes, Spencer Leigh
Morrison, H. (Salisbury)
Scott, Sir S. (Marylebone)


Hume-Williams, Sir Wm. Ellis
Morrison-Bell, Major A. C.
Seeger, Sir William


Hunter, General Sir A. (Lancaster)
Mosley, Oswald
Seddon, James


Hurd, P. A.
Munro, Rt. Hon. Robert
Seely, Maj.-Gen. Right Hon. John


Hurst, Major G. B.
Murchison, C. K.
Shaw, Hon. A. (Kllmarnock)


Illingwortn, Rt. Hon. Albert M.
Murray, Major C. D. (Edinburgh, S.)
Shaw, Captain W. T. (Fortar)


Inskip, T. W. H.
Murray, Hon. G. (St. Rollox)
Snort, Rt. Hon. E. (N'castle-on-T., W.)


Jackson, Lieut.-Col. Hon. F. S. (York)
Murray, John (Leeds, W.)
Smith, Harold (Warrington)


Jophcott, A. R.
Murray, William (Dumfries)
Sprot, Col. Sir Alexander


Jellett, William Morgan
Nall, Major Joseph
Stanier, Captain Sir Beville


Jesson, C.
Neal, Arthur
Stanley, Col. Hon. G. F. (Preston)


Jodrell, N. P.
Nelson, R. F. W, R.
Stanton, Charles Butt


Johnstone, J.
Newman, Major J. (Finchley, M'ddx.)
Starkey, Captain John Ralph


Jones, Sir Edgar R. (Merthyr Tydvll)
Newman, Sir R. H. S. D. (Exeter)
Steel, Major S. Strang


Jones, Sir Evan (Pembroke)
Newton, Major Harry Kottingham
Stephenson, Colonel H. K.


Jones, G. W. H. (Stoke Newington)
Nicholson, R. (Doncaster)
Stewart, Gershom


Jones, J. Towyn Carmarthen)
Nicholson, W. (Petersfield)
Strauss, Edward Anthony


Jones, William Kennedy (Hornsey)
Nield, Sir Herbert
Sturrock, J. Long-


Joynson-Hicks, Sir William
Norman, Major Rt. Hon. Sir Henry
Surtees, Brig.-General M. C.


Kellaway, Frederick George
Norris, Colonel Sir Henry G.
Sutherland, Sir William


Kerr-Smiley, Major P.
Oman, C. W. C.
Sykes, Sir C. (Huddersfield)


King, Commander Douglas
O'Neill, Capt. Hon. Robert W. H.
Talbot, G. A. (Hemel Hempstead)


Kin loch Cooke, Sir Clement
Ormsby-Gore, Hon. William
Taylor, J. (Dumbarton)


Knight, Captain E. A.
Palmer, Major G. M. (Jarrow)
Terrell, Capt. R. (Henley, Oxford)


Knights, Capt. H.
Palmer, Brig.-General G. (Westbury)
Thomas, Sir R. (Wrexham, Denb.)


Lane-Fox, Major G. R.
Parker, James
Thomas Stanford Charles


Law, A. J. (Rochdale)
Parkinson, Albert L. (Blackpool)
Thomson, F. C. (Aberdeen, S.)


Law, Rt. Hon. A. Bailor (Glasgow)
Pearce, Sir William
Townley, Maximilian G.


Lewis, Rt. Hon. J. H. (Univ. Wales)
Pease, Rt. Hon. Herbert Pike
Turton, Edmund Russborough


Lewis, T. A. (Pontypridd, Glam.)
Peel, Lt.-Col. R. F. (Woodbridge)
Vickers, D.


Lister, Sir R. Ashton
Peel, Col. Hon. S. (Uxbridge, Mddx.)
Waddington, R.


Lloyd, George Butler
Pennefather, De Fonblanque
Wallace, J.


Locker-Lampson, G. (Wood Green)
Perkins, Walter Frank
Walters, Sir John Tudor


Locker-Lampson, Corn. O. (Hunt'don)
Perring, William George
Walton, J. (York, Don Valley)


Long, Rt. Hon. Walter
Philipps, Sir O. C. (Chester)
Ward-Jackson, Major C. L.


Lansdale, James R.
Pickering, Gel. Emil W.
Ward, Colonel L. (Kingston-upon-Hull)


LOrdcn, John William
Pilditch, Sir Philip
Wardle, George J.


Lott-Williams, J.
Pinkham, Lieut.-Colonel Charles
Waring, Major Walter


Loseby, Captain C. E.
Pollock, Sir Ernest Murray
Warner, Sir T. Courtenay T.


Lowe, Sir F. W.
Pownall, Lt.-Colonel Assheton
Warren, Sir Alfred H.


Lyle, C. E. Leonard (Stratford)
Pratt, John William
Watson, Captain John Bertrand


Lynn, R. J.
Preston, W. R.
Weigall, Lt.-Colonel W. E. G. A.


M'Curdy, Charles Albert
Prescott, Major W. H.
Weston, Colonel John W.


M'Donald, Dr. B. F. P. (Wallasey)
Pulley, Charles Thornton
Wheler, Colonel Granville C. H.


Macdonald, Rt. Han. J. M. (Stirling)
Purchase, H. G.
White, Col. G. D. (Southport)


M'Gutfin, Samuel
Rae, H. Norman
Whine, Sir William


M`Laren, Hon. H. D. (Bosworth)
Raeburn, Sir William
Whittaker, Rt. Hon. Sir Thomas P.


M'Laren, R. (Lanark, N.)
Ramsden, G. T.
Wild, Sir Ernest Edward


M'Lean, LL-Col. C. W. W. (Brigg)
Randles, Sir John Scurrah
Williams, Lt Com. C. (Tavistock)


Macleod, John Mackintosh
Rankin, Capt. James S.
Williams, Lt.-Col. Sir R. (Banbury)


Macmaster, Donald
Raper, A. Baldwin
Williams, Col. Sir R. (Dorset, w.)


McMicking, Major Gilbert
Raw, Lieut.-Colonel Dr. N.
Williamson, Rt. Hon. Sir Archibald


Macnamara, Rt. Hon. Dr. T. J.
Rees, Sir J. D.
Willoughby, Lt.-Col. Hon. Claud


McNeill, Ronald (Canterbury)
Pees, Captain J. Tudor (Barnstaple)
Wills, Lt.-Col. Sir Gilbert Alan H.


Macguisten, F. A.
Reid, D. D.
Wilson, Capt. A. Stanley (Hold'ness)


Maddocks, Henry
Remer, J. B.
Wilson, Colonel Leslie (Reading)


Magnus, Sir Philip
Remnant, Colonel Sir James
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Maitland, Sir A. D. Steel
Renwick, G.
Wilson-Fox, Henry


Mallaby-Deeley, Harry
Richardson, Sir Albion (Peekham)
Wolmer, Viscount


Mallalieu, Frederick William
Richardson, Alex. (Gravesend)
Wood, Major Hon. E. (Ripon)


Malone, Major P. (Tottenham, S.)
Roberts, Sir S. (Sheffield, EccIesall)
Wood, Sir H. K. (Woolwich, W) Wood, Major S. Hill- (High Peak)


Manville, Edward
Robinson, T. (Stretford, Lancs.)
Woolcock, W. J. U.


Marriott, John Arthur R.
Rogers, Sir Hallowell
Wersiold, T. Cato


Mason, Robert
Rothschild, Lionel de
Worthington-Evans, Rt. Hon. Sir L.


Matthews, David
Roundel', Lt.-Colonel R. F.
Yate, Colonel Charles Edward


Meysey-Thompson, Lt.-Col. E. C.
Rowlands, James
Yeo, Sir Alfred William


Mildmay, Col. Rt. Hon. Francis B.
Royden, Sir Thomas
Young, Lt.-Com. E. H. (Norwich)


Mitchell, William Lane-
Royds, Lieut.-Colonel Edmund
Young, Sir F. W. (Swindon)


Moles, Thomas
Rutherford, Sir W. W. (Edge Hill)
Young, William (Perth and Kinross)


Nelson, Major John Elsdale
Samuel, A. M. (Farnham, Surrey)



Moore, Maj.-Gen. Sir Newton J.
Sanders, Colonel Robert Arthur
TELLERS FOR THE AYES.—Lord Talbot and Captain F. Guest.


Mooro-Brahazon, Lieut.-Col. J. T. C.
Sassoon, Sir Philip A. G. D.



Morden, Col. H. Grant
Scott, A. M. (Glas., Bridgeton)



NOES.


Adamson, Rt. Hon. William
Carter, W. (Mansfield)
Finney, Samuel


Barnes, Major H. (Newcastle, E.)
Clynes, Right Hon. John R.
Galbraith, Samuel


Brace, Rt. Hon. William
Davies. Alfred (Clitheroe)
Graham, W. (Edinburgh)


Brant, F.
Dawes, J. H.
Griffiths, T. (Pontypool)


Cairns, John
Edwards. C. (Bedwellty)
Grundy, T. W.


Cape, Tom
Entwistle, Major C. F.
Guest, J. (Hemsworth, York.)




Hall, F. (Yorks, Normanton)
MacVeagh, Jeremiah
Swan, J. E. C.


Mayday, A.
Murray, Dr. D. (Western Isles)
Thomas, Rt. Hon. J. H. (Derby)


Henderson, Rt. Hon. Arthur (Wisbech)
O'Grady, James
Walsh, S. (Ince, Lancs.)


Hirst, G. H.
Richards, Rt. Hon. Thomas
Wedgwood, Colonel Josiah C.


Hodge, Rt. Hon. John
Richardson, R. (Houghton)
White, Charles F. (Derby, W.)


Magee, J. M.
Robertson. J.
Wignall, James


Holmes, J. Stanley
Rose, Frank H.
Williams, J. (Gower, Glam.)


Irving, Dan
Royce, William Stapleton
Young, Robert (Newton, Lance.)


Kenworthy, Lieut.-Commander
Short, A. (Wednesbury)



Kenyon, Barnet
Sitch, C. H.
TELLERS FOR THE NOES.—Mr. T. Wilson and Capt. A. Smith.


Lunn, William
Smith, W. (Wellingborough)



Maclean, Nell (Glasgow, Govan)
Spoor, B. G.



Question put, and agreed to.

Resolved,
That this House, realising the serious effects upon the trade and industry of the nation of the enormous financial burdens resulting from the War, promises its hearty support to the Government in all reasonable proposals, however drastic, for the redaction of expenditure and the diminution of debt.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 22nd October, proposed the Question, "That this House do now adjourn."

Adjourned accordingly at Seventeen minutes after Eleven o'clock.